An Evaluation of Fairtrade Impact on Smallholders and ......CODER 6 Evaluation of Fairtrade Impact...
Transcript of An Evaluation of Fairtrade Impact on Smallholders and ......CODER 6 Evaluation of Fairtrade Impact...
An Evaluation of Fairtrade Impact on Smallholders and
Workers in the Banana Sector in northern Colombia
Final Report
Presented by
the Corporation for Rural Business Development
(CODER)
to
Max Havelaar – The Netherlands
Authors:
Carlos F. Ostertag, MSIM
Oscar A. Sandoval, MSc
Juan F. Barona, Marketing
Carolina Mancilla, Administration
February 2014
Conducted with support from the Dutch–Colombian
Public Private Partnership for Sustainable Banana Production
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 2
Table of Contents
Acronyms .................................................................................................................... 3
Exchange Rate (COP to USD) .................................................................................. 4
Executive Summary ................................................................................................... 5
1. Introduction ........................................................................................................ 10
2. Methodology of the Impact Study ..................................................................... 12
3. Context of the Banana Sector in Colombia ...................................................... 18
4. Characterization of Smallholders and their Cooperatives ............................. 24
4.1 Cooperatives: location and history ......................................................................................... 24
4.2 Basic characterization of cooperatives ................................................................................... 26
4.3 Banana sales volumes, sales prices and production costs ....................................................... 29
4.4 The Fairtrade Premium concept and its investment ............................................................... 36
5. Impact of Fairtrade on Cooperatives ............................................................... 40
5.1 Socio-economic impact of Fairtrade on smallholder households ........................................... 40
5.2 Fairtrade impact on smallholder organizations ...................................................................... 46
5.3 Fairtrade impact on local and regional development ............................................................. 50
5.4 Conclusions and recommendations for cooperatives ............................................................. 54
5.4.1 Conclusions on Fairtrade impact ..................................................................................... 54
5.4.2 Recommendations ........................................................................................................... 56
6. Characterization of Plantations and Hired Workers ...................................... 59
6.1 Plantations: location and history ............................................................................................ 59
6.2 Basic characterization of plantations ...................................................................................... 61
6.3 Banana sales volumes, sales prices and production costs ...................................................... 62
6.4 The Fairtrade Premium concept and investment .................................................................... 65
7. Impact of Fairtrade on Plantations................................................................... 68
7.1 Socioeconomic impact of Fairtrade on hired workers’ households ....................................... 68
7.2 Fairtrade impact on plantation profitability and investment .................................................. 74
7.3 Fairtrade impact on hired workers’ organizations .................................................................. 77
7.4 Fairtrade impact on local and regional development ............................................................. 78
7.5 Fairtrade impact on natural resource management ................................................................. 81
7.6 Conclusions and recommendations for plantations ................................................................ 83
7.6.1 Conclusions on Fairtrade impact ..................................................................................... 83
7.6.2 Recommendations ........................................................................................................... 86
Annexes ..................................................................................................................... 88
Annex 1. Terms of Reference for Fairtrade Impact Study ........................................................... 89
Annex 2. Research Questions for Fairtrade Impact Study ......................................................... 104
Annex 3. Inventory of Instruments for Fairtrade Impact Study ................................................. 120
Annex 4. List of Interviews to Other Actors and Support Institutions ........................................ 121
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Acronyms
ANDI National Industrial Association
ASOBAM Association of Banana Growers of Magdalena
ASOBANARCOOP Cooperative of Small-scale Producers of Rio Frio
ASOCOOMAG Association of Banana Traders of Magdalena
ASOPROBAN Cooperative of Land tenants and Small-scale producers
AUC United Self-defense of Colombia
AUGURA Colombian Banana Growers Association
BANAFRUCOOP Cooperative of Small-scale Banana Producers
BANACOL Associated Banana Growers of Colombia
BANAFRUT International Traders BANAFRUT S.A. (exporter)
BANASAN United Banana Growers of Santa Marta S.A.
CENIBANANO Banana Research Center
CMLS Current Minimum Legal Salary
CODER Corporation for Rural Business Development
COMFAMA Family Compensation Fund of Antioquia
COMFENALCO Family Compensation Fund of the National Federation of Retailers
COOBAFRIO Banana Cooperative of Rio Frio
COOBAMAG Multi-active Banana Cooperative of Magdalena
CORBANACOL Corporation of BANACOL
CORFATRA Future Vision Fair Trade Corporation
DANE National Administrative Department for Statistics
EAT Associative Work Enterprises
ECV Survey on Quality of Life (DANE)
ELN National Liberation Army
ELP Patriotic Liberation Army
EMPREBANCOOP Cooperative of Small-scale Banana Businessmen
EPS Health Service Providing Company
EXW Ex Works
FARC-EP Armed Revolutionary Forces of Colombia – People’s Army
FISA Social Investment Foundation of ASOPROBAN
FLO Fairtrade Labeling Organization
FUNDABANASAN BANASAN Foundation
FUNDAFRUT Social Foundation of BANAFRUT
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FUNDAUNIBAN UNIBAN Foundation
FUNTRAJUSTO Fairtrade Workers Foundation
Fyffes Leading importer and distributor of tropical products with operations
in Europe, USA, Central America and South America
GAP Good agricultural practices
GDP Gross Domestic Product
ICA Colombian Agricultural Institute
IDS Institute of Development Studies
IPS Health Service Providing Institute
ISEAL International Social and Environmental Accreditation and Labeling
PIVD Project for Induction to Life in the University
PPE Personal Protection Equipment
QMS Quality Management System
SENA National Learning Service
SGC Quality Management System
SINTRAINAGRO Independent Agricultural Workers Union
SISBEN Subsidized Health System
UNIBAN Banana Growers Union of Urabá
USA United States of America
TECBACO Baltime Techniques of Colombia S.A.
Exchange Rate (COP to USD)
Year Exchange rate (average)
February and March 2013 1,791
2012 1,793
2011 1,845
2010 1,889
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Executive Summary
Max Havelaar Netherlands, in close collaboration with Fairtrade International, the Fairtrade
Foundation, and the Dutch Embassy in Colombia, commissioned a study on the impact of Fairtrade
certification for banana-growing smallholders and their cooperatives in the Magdalena Department
and for hired workers in banana plantations in the Urabá region, in northern Colombia. The study
assessed the impact of Fairtrade (production and trade norms, prices and Premium, certification,
support to producers and market access) on economic, environmental and social development
conditions of participating smallholders and hired workers; smallholder and hired-worker
organizations; the ability to organize and strengthen the organization; development at the family
and community level, and the impact on the smallholder’s position in the banana production chain
at the national level.
In the year 2013, there are 36 Fairtrade-certified banana organizations in Colombia. Six of
them are small-farmer cooperatives in the Magdalena Department, while two are associated
working cooperatives in the Urabá region. The rest of the partners are hired-labour plantations in
the Urabá region. Most organizations sell their bananas in the Fairtrade system through the
international trader UNIBAN, one of the largest banana exporters in Colombia, and Fyffes, a
leading importer and distributor of tropical products. Fifteen certified plantations are associated and
sell their fruit to BANAFRUT, a vertically-integrated company that also exports, and one
cooperative sells through BANASAN.
Structured questionnaires were applied to smallholders in cooperatives and hired workers in
plantations; semi-structured interviews were applied to other individuals such as leaders, managers
and technical staff of cooperatives and plantations and to buyers and service providers; and focus
group sessions were conducted with a sample of smallholders, of hired workers in farms and
plantations, and of family members. In addition, seven mini-case studies for smallholders and hired
plantation workers were prepared.
Main conclusions of the Fairtrade impact study for the smallholder banana sector
The study confirmed that Fairtrade has had a very positive impact in the last three years at
the level of smallholder households and farms, smallholder cooperatives, and neighboring
communities. Premium investment has been an essential factor for achieving this impact. On
average, 35% of the Fairtrade Premium is invested in on-farm productivity and lowering banana
production costs; 15% is spent to cover administration costs; 12% is used to pay for Fairtrade-norm
maintenance; and 10% is expended for social welfare in the community.
Fairtrade has contributed to increasing the standard of living of smallholders’ households in
three ways. Sales of Fairtrade-certified bananas at the minimum price has increased household
income and stability; the investment of the Fairtrade Premium in services for smallholders,
including loans, has facilitated housing improvement, purchase of household assets, and better
access to medicine and education; and part of the Premium is being invested in enhancing on-farm
productivity and lowering banana production costs. However, 23% of smallholder households
mentioned that they still have food security constraints. This farmer segment has lower per capita
income because their farms are quite small. Fairtrade has improved smallholder cash flow because
it has increased incomes and income stability, promoted a savings culture, lowered banana-
production costs, and improved access to credit and emergency funds.
All smallholders believe that Fairtrade is a great contributor for making family agriculture
more attractive because it has enabled cooperatives to support them with respect to market access,
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innovation and technology transfer, transparency and justice, on-farm production assets, and various
services. They value the fact that cooperatives are now sharing with them the risk and benefits of
banana production.
Fairtrade has contributed enormously to the strengthening of smallholder cooperatives.
Total banana sales volumes are increasing, as well as the proportion of bananas sold on Fairtrade
terms (80%). Since cooperatives are the liaison with Fairtrade and exporters that represent an
attractive market, smallholders appreciate their membership much more. Four of the six
cooperatives studied have increased their membership in the last three years. The Premium has
funded better-qualified administrative personnel with a greater business orientation and has allowed
cooperatives to provide a broad portfolio of services that are greatly valued by their members.
However, the study evidenced that cooperatives have several management weaknesses, mostly
related to their inadequate handling of Fairtrade- and banana value chain-related information,
information systems, and communications with members.
Cooperative leaders and managers mentioned several Fairtrade-related concerns.
Insufficient market demand in European Fairtrade markets forces exporters to buy on average only
80% of their Fairtrade-certified banana production. The Fairtrade minimum unit price for bananas
is equal or less than its unit cost of production, which endangers the sustainability of smallholders
in the banana business. Smallholders are assuming a minor trade logistical cost that should be
covered by one of the exporters. The cooperatives are founding a second-level organization
(ASOCOOMAG), to improve their bargaining power and margin in the Fairtrade banana value
chain.
Fairtrade has contributed much to the revitalization of the regional economy in the
Magdalena banana zone, through higher incomes, investment of the Fairtrade Premium, and job
creation, and by means of the multiplier effect of this incremental income that has stimulated local
demand for goods and services. Smallholders consider that their linkage to Fairtrade helped them to
overcome the social and economic crisis left by the armed conflict.
Main recommendations of the Fairtrade impact study for the smallholder banana sector
As the Fairtrade market is very important for the operations of smallholders, it is
recommended that the Fairtrade System intensify its market penetration, market development and
market awareness strategies in European countries to favor market expansion for Fairtrade-certified
bananas and price increases. To make smallholders better understand how the Fairtrade banana
chain operates, it is necessary that Fairtrade International explain to cooperative leaders and
managers the context and process by which sales prices are defined and to emphasize the great
power that supermarkets have. It is suggested that Fairtrade International facilitate the process to
support cooperatives in determining banana production costs accurately.
It is important that Fairtrade International lead the planning of a banana chain meeting
with the participation of cooperative leaders, exporters and Fairtrade, to improve price and cost
transparency, and to clarify responsibilities and commitments of the different participants in the
banana value chain. It is recommended that Fairtrade International support smallholder
cooperatives in the establishment of a new trade contract policy that can favor their economic
growth and support their initiative to establish ASOCOOMAG as a direct exporter of Fairtrade-
certified bananas to international markets.
Some cooperative members have tiny farms that are hardly economically viable. It is
recommended that cooperatives execute a strategy so all members can maximize banana yields on
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their farms. It is necessary that cooperatives develop integrated strategies targeted to 15% of their
members in poverty, focused on raising household incomes and food security. As the average age
of members is high, it is important that cooperatives develop a strategy for generational renewal
among their members, which could include stimuli for participation of youngsters on farms and in
the cooperative.
It is recommended that cooperatives clearly demonstrate that the Fairtrade minimum price
is not covering real banana production costs. It is important that cooperatives establish a new trade
contract policy that can favor their economic growth. It is suggested that cooperative leaders and
managers prepare a feasibility plan for ASOCOOMAG as a direct exporter of Fairtrade-certified
bananas to international markets.
Cooperatives depend much on the Fairtrade Premium, but their operations should be viably
run without this extra income. It is necessary that cooperatives implement viable business models
that can permit them to self-finance more of their operation without having to depend so much on
Fairtrade-Premium funding. It is important that cooperatives improve their management
information systems and communication with their members, and update Fairtrade-certified banana
production costs using appropriate accounting methods.
Cooperatives tend to use the Fairtrade Premium more for internal use, while a lot of
members stress other needs as well. It is therefore recommended that cooperatives look for
mechanisms to increase the impact in communities in their area of influence that could include
strategic alliances to secure counterpart funding for key community projects. Regional projects
could include the design and implementation of business models for offering low-cost drinking
water and toilets for rural communities and also for supplementing or improving the inadequate
health-care services offered by SISBEN and EPS to cooperative members and their relatives.
As cooperatives expressed some confusion as to whom should bear certain trading costs, it
is recommended that exporters participate in work meetings with Fairtrade International members,
cooperative managers and leaders to discuss and improve price and cost transparency, and to clarify
responsibilities and commitments of the different participants along the Fairtrade banana value
chain
Main conclusions of the Fairtrade impact study for hired workers in plantations
Fairtrade has had a significant impact on hired workers in Fairtrade-certified banana
plantations in the last three years, at the level of hired-worker households, plantations, hired-worker
organizations and nearby communities. The Fairtrade Premium of all affiliated plantations in Urabá
was invested in 2011 in workers’ housing construction and improvement; in recreational and
cultural programmes, medical assistance, and community assistance; and in education and training
programmes. The main project for hired workers and Joint Bodies is to achieve home ownership
for all workers. 52% of workers improved their housing in the last three years. Joint Bodies
invested a relatively low Premium percentage on community projects. Most investment in workers’
and community well-being is funded by the Premium and as a much lesser proportion by the private
sector.
Fairtrade impact at the hired-worker and household level includes better labour conditions
such as higher salaries, payment of legal and extra social benefits, and greater job stability. Only
16% of the Control plantation workers have indefinite-term contracts versus almost 100% for
Fairtrade plantation workers. All the workers think that their quality of life with Fairtrade is better
and most think the same about their current economic situation. No worker mentioned having food
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security problems. Wage levels of indefinite term- and fixed-term contracts in the plantations
studied reached a peak in 2011 but were lowered in 2012 and remained the same in 2013.
Fairtrade has contributed to workers’ health improvement by expanding access to personal
protective equipment, occupational health, adequate sanitary services, and dining halls at the
workplace. They also receive training on health-related topics and benefit from the lesser use of
agrochemicals and reduction of work-related sickness and accidents. Hired workers also receive
training, recreational, social support, and credit services. They also have access to educational
support, enjoy freedom of association, and have increased their personal savings. Workers at the
Control plantation have less access to formal loans, scholarships, and request more sick leave than
Fairtrade plantation workers.
Fairtrade affiliation opens preferential markets for plantations because of the resulting good
quality of the fruit. Fairtrade impact included increased sales volumes and higher prices for
Fairtrade-certified bananas. Although banana sales volume decreased in the last three years, the
percentage of boxes sold on Fairtrade terms actually increased, to 78%. Managers interviewed
lacked a consensus on Fairtrade effects on plantation profitability. Managers did agree that the
minimum price for Fairtrade-certified banana was equal or lower to its production cost, so
profitability levels are minimal for plantations.
The three companies invested in the last three years around USD 167,400 to comply with
Fairtrade requisites, mainly by improving plantation and water treatment infrastructure, and also
spent USD 891,000 to reinforce their business structures and cover increased labour costs.
Fairtrade affiliation has also resulted in a notable reduction of direct investment in workers by the
plantations, because many services demanded by workers are now channeled through the Joint
Body and are covered by Premium funds.
Fairtrade has also supported improvement of banana-production technology, greater
environmental protection and rational use of agrochemicals. However, annual average banana
yields for all three cooperatives have been decreasing due to climate changes and due to problems
with manual weed control.
Fairtrade impact on Joint Bodies has resulted in greater worker participation in decision-
making and strengthening of leadership and human capital of worker representatives. An Annual
Plan is prepared for the adequate administration of the Fairtrade Premium. Workers express a solid
credibility of workers in the Joint Body, and finally the Joint Bodies have developed a service
portfolio directed to workers, including credit, training and educational aid.
Fairtrade has generated jobs in the region by contributing to the reactivation of banana
exports, by the implementation of Fairtrade standards and by Fairtrade Premium investment. This
has resulted in higher, stable workers’ incomes. Premium investment in housing construction and
improvement, and household appliances, among others, raise the local demand for goods and
services, which in turn stimulates employment in local commerce. All of the above has a multiplier
effect that stimulates the regional economy and generates further employment.
Labour conditions in the banana sector of Urabá are generally good. There is uniformity in
terms of wage payments, because 98% of the workers are under the same Collective Bargaining
Agreement led by AUGURA and SINTRAINAGRO. Therefore, the difference in salary between
Fairtrade and non-Fairtrade workers is minimal. Fairtrade has contributed to this because now more
workers have labour contracts and are paid the legal social benefits.
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FUNTRAJUSTO, a collective initiative of most of the Joint Bodies in Urabá, was constituted
to work together with municipalities and other local development agencies in the planning and
execution of larger community projects. Some municipalities and family compensation funds like
COMFENALCO and COMFAMA are also supporting local activities and services for workers and
their families. Colombia tends to have a weak government presence in rural areas and small
municipalities tend to have scarce funds. Hence, most of the current services would not exist
without the Fairtrade Premium. However, the government is providing subsidies for the
construction of workers’ housing and Joint Bodies are advancing in their lobbying capacity to
obtain subsidies for workers from the local government.
Main recommendations of the Fairtrade impact study for hired worker in plantations
It is recommended that Fairtrade International revise the banana sales price and adjust it to
reflect realistic production costs according to Fairtrade principles.
It is also recommended that Fairtrade International carry out some further research as to
whether services formerly financed by the plantations are now covered by Fairtrade Premium funds,
suggesting that Premium funds bring in less extra income for workers.
It is suggested, to stimulate household income diversification, that Joint Bodies establish
“business incubators” to advice, coach and fund microenterprises with the participation of interested
women and youngsters. It is recommended that a greater percentage of the Fairtrade Premium be
invested in pertinent community-level projects and that Joint Bodies and FUNTRAJUSTO continue
to develop strategic alliances to attract counterpart funding for these projects. It would be
appropriate to explore possible counterpart funding by the banana plantations and their foundations
for community projects.
It is important to continue training programmes for Joint Body workers’ representatives, to
reinforce their participation and leadership in meetings, and to encourage them to take note of
workers’ household members’ ideas on how to spend the Premium.
It is recommended that plantations request Fairtrade International to revise the banana
sales price and adjust it to reflect realistic production costs according to the Fairtrade principle:
“Fairtrade prices respond to the real production value”. In addition, to determine precisely the
effect of Fairtrade affiliation on plantation profitability, it is suggested that a cost/benefit analysis be
conducted of the Fairtrade banana business of different plantations with different production scales.
It is important that plantations continue to fund projects to promote the social well-being of
hired workers, relatives, and the community in general. It is important that the direct investment by
plantations be supplementary to Premium-funded investments.
It is suggested that the plantations or AUGURA approach CENIBANANO, the national
banana research center, to request additional research on alternative ways to control banana weeds,
pests and diseases in large banana plantations to reduce dependence on agrochemicals.
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1. Introduction
Max Havelaar Netherlands, in close collaboration with Fairtrade International, the
Fairtrade Foundation, and the Dutch Embassy in Colombia, commissioned CODER1 a
study on the impact of Fairtrade banana certification for smallholders and their cooperatives
in the Magdalena Department and for hired workers and plantations in the Urabá region of
the Antioquia Department, in northern Colombia. This study was appointed because the
banana sector is very important for the economy of the two regions mentioned and because
these Colombian smallholder organizations and plantations are currently one of the main
suppliers of bananas for the Fairtrade markets in the United Kingdom and The Netherlands.
In addition, this research supplements an earlier 2010-11 banana-sector study prepared by
IDS in 2010 in the Dominican Republic, Ecuador, Ghana and the Winward Islands, in
which Colombia was not included.
The study assessed the impact of being part of Fairtrade (production and trade
norms, prices and Premium, certification, support to producers and market access) for
banana-growing smallholders and their organizations, and for hired workers in plantations
of Colombia. The following areas were taken into account to measure impact: the
economic, environmental and social development of participating smallholders and hired
workers; smallholder and hired worker organizations; the ability to organize and strengthen
the organization; development at the family and community level, and the impact relative to
the smallholder’s position in the banana production chain at the national level. The study
also analyzed how these impacts contribute to the achievement of Fairtrade’s development
objectives, such as sustainable livelihoods, individual and collective empowerment, and to
make trade more just for poor farmers and workers.
In the year 2013, there are 36 Fairtrade-certified organizations in Colombia.
Six of them are smallholder cooperatives in the Magdalena Department, while two are
associated working cooperatives in the Urabá region. The Magdalena cooperatives are
COOBAMAG, ASOPROBAN, EMPREBANCOOP, BANAFRUCOOP,
ASOBANARCOOP and COOBAFRIO, all located in the towns of Zona Bananera and
Ciénaga in the Magdalena Department of northern Colombia. The rest of the partners are
hired-labour plantations in the Urabá region. Most organizations sell their bananas in the
Fairtrade system through the international trader UNIBAN, one of the largest banana
exporters in Colombia, and the importer Fyffes.2 Fifteen certified plantations are associated
to BANAFRUT and one cooperative sells through BANASAN.
The Magdalena Department has an agricultural sector where bananas are mainly
produced in the towns of Santa Marta, Zona Bananera, Ciénaga, El Retén, Fundación and
Aracataca. In 2012, there were approximately 13,200 hectares under banana cultivation, of
which 80% were grown by large- and medium-scale producers and the remaining 20%
grown by nearly 700 smallholders in small farms with an average area of 3.21 hectares.
1 Corporation for Rural Business Development.
2 Leading importer and distributor of tropical products with operations in Europe, USA, Central America and
South America.
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The Urabá region in the Antioquia Department is also largely agricultural, and produces
mainly bananas, plantains and cassava. In 2012, this region had 35,200 hectares under
banana cultivation, mostly in plantations, with 90% of its economy dependent on banana
and plantain exports. Fruit that does not meet quality standards is sold in the domestic
market.
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2. Methodology of the Impact Study
This impact study has two main objectives. First, to determine the key
socioeconomic characteristics of smallholders and their cooperatives, and of hired workers
and their plantations in Colombia’s Fairtrade banana sector; and secondly, to identify
Fairtrade impact on (a) smallholders, their cooperatives, workers they hire, and in the
community, and (b) hired workers in plantations, their organizations, plantations, and in the
community (see Annex 1 for Terms of Reference). The research questions (see Annex 2),
the corresponding indicators and the several research instruments addressed the research
objectives. To provide an understanding of the counterfactual, one recently certified
plantation in Urabá and five individual non-Fairtrade smallholders in Magdalena were also
studied.
As a planning tool, two matrices were prepared with the support of Max Havelaar,
Fairtrade International and ISEAL3; one for cooperatives and another for plantations,
indicating the level of analysis, impact themes, indicators and their sources, units of
measurement, and data collection methods. Due to time, budget and logistical constraints
such as distance between farms, availability for survey, and climate, CODER adjusted its
data-collection procedure by inviting managers to group interviewees in comfortable,
central locations.
Sources of information
Secondary information was reviewed on the Fairtrade banana chain in Colombia,
including documents provided by Max Havelaar, Fairtrade International and other material.
Primary information was collected from smallholders in the six Fairtrade-certified
cooperatives and five individual non-Fairtrade farmers in Magdalena, and hired workers in
four Fairtrade-certified plantations in Urabá (including one recently certified plantation as
control). Information was also collected from smallholders’ and workers’ family members,
managers and leaders in cooperatives and plantations, technical staff and service providers
and buyers, including personnel from Fairtrade International and private banana-sector
foundations. See Annex 3 for a list of research instruments used in this study and Annex 4
for a list of interviews conducted with other organizations and support institutions.
Data collection methods
CODER obtained primary information in February-March 2013 by using structured
questionnaires to survey smallholders and hired workers; several semi-structured guides to
interview other individuals like leaders, managers, technical staff, and buyers, and several
guides to conduct focus group sessions with smallholders, hired workers and family
members. Each focus group session involved 5-8 participants. Furthermore, seven mini-
case studies of smallholders and hired workers were prepared. These instruments covered
all main research questions as highlighted in the Terms of Reference (ToR). It should be
noted that CODER sent a format in advance to cooperative and plantation managers and
3 International Social and Environmental Accreditation and Labeling.
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 13
leaders, requesting key quantitative and financial data. This gave these key informants
enough time to gather accurate information.
Cooperative managers were contacted several weeks in advance of the fieldwork,
and were informed of the dates and exact number of representative individuals (sample) to
be surveyed. These individuals, mostly smallholders and some relatives were invited by
the cooperative to a comfortable, quiet room at the cooperative headquarters. Here the
CODER research team interviewed them, both individually and in focus group sessions.
Managers or cooperative leaders were not in the room when smallholders and relatives
were interviewed. This centralized procedure was necessary to avoid wasting time
travelling from farm to farm and to accelerate survey application, taking into account that
the sample was large (230 smallholders). Although the representative sample of
smallholders was invited well in advance, some did not arrive, for several reasons. In this
case, CODER had to ask cooperative administrators to complete the target sample required
with other smallholders. Since 77% of the smallholder population was being interviewed,
this procedure was considered to be adequate.
Likewise, in the case of plantations, managers were contacted several weeks in
advance of the fieldwork, and were informed about the exact number of hired workers
required for the representative sample and to be summoned to an appropriate central
location. CODER decided to randomly select interviewees from among the workers
available during its visit to plantations. Plantation managers were not in the room when the
chosen hired workers were interviewed.
Managers and leaders were contacted with two objectives; firstly, to provide general
basic information on their organizations and, secondly, to respond to the structured
questionnaire with the research questions. Most of the questions in structured
questionnaires were multiple-choice to speed up data-recording and processing. The
objective of the focus group sessions was to obtain in-depth information on certain selected
topics.
Sample used
To select the sample, the following criteria were used:
• A representative section of smallholders and plantations. All of the six Fairtrade-
certified smallholder cooperatives and four plantations (one used as control) were
selected. The ToR demanded that a high percentage of the smallholder population in
Magdalena be surveyed; this was also due to the importance for the Public Private
Partnership (PPP) programme of the Dutch Embassy.
• Coverage of the different supply chains. The UNIBAN, BANAFRUT and BANASAN
channels were included. Four plantations were chosen as follows; two for UNIBAN,
one for BANAFRUT, plus the control group and the six smallholder organizations, five
related to UNIBAN and one to BANASAN, since smallholders are not linked to
BANAFRUT.4
4 BANAFRUT is vertically integrated.
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• Duration of the Fairtrade certification: Enough time is needed to perceive a significant
impact due to participation in Fairtrade. For these reasons, only plantations that
had been Fairtrade-certified for three years or more participated in this study.
Smallholder organizations were all included.
• Volumes traded in Fairtrade: In order to compare, the plantations selected exhibit large
and small volumes of Fairtrade bananas.
Table 1 summarizes the sample chosen for this Fairtrade impact study. In total,
more than 440 individuals were contacted in the two regions, of which more than 70% are
from Magdalena. It should be pointed out that the smallholder sample from Magdalena
(230) represents 77% of total smallholders that produce Fairtrade bananas (300). The
hired-worker sample was 46, out of a population of 636 hired workers in the three
plantations studied. Another 40 workers and relatives were interviewed in six focus group
sessions. Table 2 provides sample details for each of the ten banana organizations
involved in this Fairtrade impact study.
Table 1. Summary of the sample used for the Fairtrade impact study in the
Colombian banana chain
Instrument Magdalena Urabá
Fairtrade-linked
Individual surveys, smallholders and workers 230 46
Interviews of other chain participants 42 21
Focus group sessions, smallholders and workers 3 3
Focus group sessions, family members 3 3
Focus group sessions, hired workers in smallholder farms 2 0
Interviews with smallholders and workers 4 3
Controls (not linked to Fairtrade)
Instrument Cooperatives Plantations
Individual surveys, smallholders and workers 5 6
Interviews of other chain participants 0 7
Focus group sessions 0 2
Interviews (managers, key informants) 3 1
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Table 2. Details of the sample used in the ten Fairtrade banana organizations in
Colombia
5 There are three types of focus group sessions; with farmers or hired workers, with family members, or with
workers hired in the smallholder farms. 6 With smallholders and hired plantation workers (mini-case studies).
7 Includes managers, leaders, technical staff interviewed individually, plus the number of smallholders, hired
workers and relatives who participated in the focus groups sessions. 8 The sample for the plantations permits a maximum Error Margin of 10% at a 90% Confidence Level.
Organization # of
individuals
#
individuals
in sample
%
# of focus
group
sessions5
Inter-
views6
Sample of
other
actors7
Smallholder cooperatives in Magdalena
ASOPROBAN 80 57 71 2 1 15
ASOBANARCOOP 44 38 86 1 0 8
COOBAMAG 40 32 81 0 0 8
COOBAFRIO 42 34 81 1 0 8
BANAFRUCOOP 33 26 79 2 1 15
EMPREBANCOOP 59 43 73 2 1 15
Non-Fairtrade
smallholders (Control) N.A. 5 0 0 0 3
Total 300 230 77 8 3 72
Hired plantation workers in Urabá8
Bananeras de Urabá 458 34 7.4 2 1 15
Los Cedros 155 8 5.2 2 1 8
Marta María 23 4 17.4 2 1 15
Plantation (control) 43 6 12.0 2 1 15
Total 679 52 7.7 8 4 53
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 16
Limitations while collecting primary information
In general, the logistical support (transportation of CODER team, contacting of
interviewees, coordination of interviews) provided by both cooperatives and plantations
was good. However, with respect to delivery of reliable information, cooperatives showed
some deficiencies, probably caused by their weak management information systems. All of
the four plantations contacted handed over only part of the quantitative information
requested by CODER; one of the plantations supplied little financial information.
Other limitations were encountered during collection of primary information, as
follows:
The questionnaires for smallholders and hired workers were long. Each smallholder
questionnaire took, on average, one hour to complete and hired-worker questionnaires
took somewhat less, 45 minutes.
The banana importer did not provide requested commercial information, with the
excuse that it was confidential; one of the exporters supplied information related to
Focus group session with relatives
of hired workers at Bananeras de
Urabá
Focus group session with
EMPREBANCOOP smallholders
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 17
cooperatives but not to plantations; while another exporter was briefly interviewed
personally, but did not sent the completed questionnaire that had been requested.
Few non-Fairtrade smallholders living near some cooperatives were available for
interviews because they were not summoned in advance, as had been requested. It
should be noted that many non-Fairtrade farmers are not small-scale. So the sample of
non-Fairtrade smallholders remained small.
Cooperative smallholders and leaders do not differentiate between expenditure related
to Fairtrade and GlobalGap9 certification, so it was difficult to link conclusions to the
specific individual certifications.
Cooperative and plantation managers and staff sometimes provided irregular or odd
data with respect to banana yields, costs of production, and additional certification-
related expenses, which suggests that management information systems are weak.
During the individual interviews, smallholders had difficulties recalling accurate data
on banana volumes and production costs, and interviewers had to support them when
making calculations.
Since gaining access to a non-Fairtrade plantation as a control group was difficult, it
was decided to select a recently Fairtrade-certified plantation where impact had not
taken place yet.
Data analysis
The CODER research team conducted a quantitative analysis of the data collected
through structured questionnaires, including the calculation of parameters such as
frequencies, averages and percentages. Data gathered in the focus group sessions and
interviews was treated qualitatively. All of the information was processed and analyzed for
each research question proposed in the ToR.
Eleven Fairtrade-impact reports by organization were prepared in Spanish, as
follows: six cooperative reports, four plantation reports, and one report on the small, non-
Fairtrade smallholder sample in Magdalena. These reports were sent to the organizations
for their feedback, but the response was scarce. Subsequently, a draft final general report
was developed in Spanish and English versions, and was shared by the Max Havelaar study
coordinator with several Fairtrade International members and the PPP programme for their
feedback.
9 Gap stands for Good Agricultural Practice and GlobalGap is the worldwide standard that assures it.
GlobalGap is a not-for-profit organization promoting safe, sustainable agricultural production worldwide that
sets voluntary standards for the certification of agricultural products around the globe. More and more
producers, suppliers and buyers are harmonizing their certification standards to match.
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 18
3. Context of the Banana Sector in Colombia
Colombia, the second most biodiverse country in the world, has an area of
1,141,000 km2 and a multicultural population of 47.2 million
10, 55% of which is less than
30 years old. Colombia has seven metropolitan areas with a population of more than one
million inhabitants.11
In 2012, the Gross Domestic Product (GDP) grew by 4% and the per
capita GDP was USD 8,000.12
The Colombian economy is based on the production of
primary goods for export and consumer goods for the domestic market. Coffee production
in Colombia has been a traditional economic activity, and it is still an important global
exporter, but the importance of coffee has declined in the last three years. In 2011, 7.8
million 60-kg bags were produced, a 12% decrease relative to 2010.13
Colombia is also an
important producer of flowers and fruits, including bananas and plantains. The importance
of oil for the Colombian economy has been growing in the last decades, and in 2012 it
produced nearly one million barrels of oil daily14
, making it the sixth largest producer in the
continent. Coal production is also prominent, with an output of 85 million tons in 201115
,
plus the production and export of gold, emeralds, and diamonds. The main industrial
outputs in Colombia include textiles, automobiles, chemicals and petrochemicals.
Colombian exports in 2012 amounted to USD 60,667 million, and the main destinations
were the USA, China, Spain and Venezuela.16
The banana sector in Colombia
Colombia produces and sells two types of bananas; bananas for export and local
bananas (murrapo) for local consumption. Production of bananas for export is concentrated
in the Urabá region and the Magdalena Department in northern Colombia, whereas bananas
production for the domestic market is widespread but exhibits a much lower crop area and
volume. The history of bananas for export in Colombia began in 1885 in the Department of
Magdalena, where the first “Gross Michel” banana varieties were planted, brought in from
Panama. In 1889, the export of bananas to New York began. In 1900, the first banana
plantations were established in Urabá with investment from a German company. In 1960,
the United Fruit Company expanded commercial banana production in Urabá, partly due to
the crisis in the Magdalena banana zone where banana production was steadily decreasing.
The banana agroindustry has developed as a traditional agro-exporting chain, and exports
94 million boxes annually, amounting to USD 746 million; this amount is equivalent to 3%
of the total export volume and contributes 0.4% of the GDP.17
Bananas occupy 1.5% of the
Colombian land area planted in permanent crops.18
10
Source: DANE, Forecast 2013. EIU. 11
PROEXPORT Colombia, 2013. 12
ANDI, 2012. 13
El Colombiano: Coffee production in the country decreased 12 percent in 2011. 14
El Espectador: Colombia to produce one million barrels of crude oil daily ending 2011. 15
El Colombiano: Coal production will probably increase 14 percent this year. 16
PROEXPORT Colombia, 2013. 17
AUGURA: http://www.augura.com.co/index.php?option=com_content&view=article&id=11&Itemid=21 18
http://www.caracol.com.co/noticias/economia/huelga-en-las-fincas-bananeras-de-
uraba/20090508/nota/808335.aspx
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 19
In 2012, Colombia had more than 48,400 hectares under banana production for
export, 73% (35,200 hectares) located in the Urabá region and 27% (13,200 hectares) in the
Magdalena Department. Most of the population in these two regions is poor, suffers social
exclusion, and belongs to the lowest income strata (SISBEN 1 and 2). In general, they have
a high level of unsatisfied basic needs and still depend on government and international
cooperation investment for their socioeconomic development.
In the Urabá region, with a population of 600,000 of which a high proportion are
immigrants, banana production is located mainly in the towns of Chigorodó, Carepa,
Apartadó and Turbo. Here, 24,000 direct and 72,000 indirect jobs are generated, mostly in
agricultural and other support services and trading logistics, plus another 3,000 jobs in
factories producing boxes, seals, plastic, shipyards, air fumigation services, and other agro-
industrial goods and services. In 2012, Urabá exported 65 million boxes of bananas, a
7.6% decrease over 2011, mainly to the European Union and the USA, generating an
income of USD 576 million.19
In Magdalena, the main banana production is located in the towns of Santa Marta,
Zona Bananera, Ciénaga, El Retén, Fundación and Aracataca, where 8,000 direct and
22,000 indirect jobs are generated. In 2012, Magdalena exported 25.4 million boxes of
bananas, a 7.5% increase over 2011, principally to the USA and the European Union,
generating an income of more than USD 170 million.20
However, the banana production structures are very different in these two regions.
In Urabá, banana production is conducted in 350 medium- and large-scale commercial
farms or plantations with an average size of 80 hectares. Permanent and temporary
workers, mostly men living in the area, are hired to perform agricultural and packing tasks.
In 1990, the ownership of banana plantations was transferred from the large multinational
exporters to large national commercial farmers. The main producers are mostly companies
with several large farms, such as Bananeras de Urabá; the BANAFRUT economic group
which is vertically integrated (produces, processes and exports bananas) with certified and
non-certified farms; and medium- and small-scale companies with one or more farms, such
as Antonio Jairo Jaramillo Sossa, which owns the Marta María farm.
These plantations are production- and labour-intensive, have access to better
technology, roads, infrastructure (irrigation and fruit transportation) and exhibit higher
productivity levels (41 tons/hectare). They also have good information systems,
traceability and logistical management. Their main objective is to maintain acceptable
profitability levels by maximizing banana-yield levels and minimizing their production
costs, without damaging the environment or exploiting their hired workers. However,
plantations face challenges such as market uncertainties, exchange rate variations
(devaluation of USD versus COP), climatic changes, the high cost of controlling Black
Sigatoka21
and higher input prices. Finally, the principal challenge of hired plantation 19
Augura: http://www.augura.com.co/index.php?option=com_content&view=article&id=13&Itemid=31 20
Augura: http://www.augura.com.co/index.php?option=com_content&view=article&id=13&Itemid=31 21
Black Sigatoka, a leaf spot disease of banana plants caused by a fungus, was discovered in 1963. Plants
with leaves damaged by the disease may have up to 50% lower yield of fruit and control can take up to fifty
sprays a year.
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 20
workers is to defend their wages and labour rights, taking into account that banana retailers
(supermarkets) are putting strong pressure on their suppliers to keep prices low.
In sharp contrast, banana production in Magdalena is conducted in 1,000 large and
small farms. Large farms are profit-driven and their areas range from 50 to 100 hectares,
whereas small farms combine subsistence farming and profit-driven production, and their
area ranges from 0.5 to 8 hectares, with an average of 3.2 hectares. Smallholders work on
their farms but also hire workers, mostly temporary and male. The smallholder
cooperatives linked to Fairtrade only own approximately 7.5% of the land planted in
bananas in Magdalena, sell a similar percentage of the banana boxes, and own only 2% of
the total banana area in the two regions studied, Urabá and Magdalena.
Smallholder cooperatives have limited access to technology, land and credit, and
they also lack funds to invest in infrastructure (irrigation and fruit transportation). In
consequence, their productivity is lower (36 tons/ hectare) and they have higher banana
production costs than plantations in Urabá. Smallholders also have lower education levels,
weak negotiation skills and are sometimes subjected to exclusivity contracts by buyers.
Hired workers in smallholder farms are sometimes poorly paid. Smallholder cooperatives
face challenges related to market uncertainty, exchange rate variations, meeting quality
standards, access to resources, and high production costs and competitiveness in general.
The banana value chain
The banana value chain includes input suppliers (boxes, seals, plastic, fertilizers, air
fumigation), river and maritime transporters, ports, container terminal, trade associations,
labour unions, banana growers enterprises, large- and small-scale banana farmers,
smallholder cooperatives, exporters, importers, retailers (mostly supermarkets in the
European Union and the USA), private-sector foundations, and agencies providing
technical and social support services.
The trade organization, AUGURA, groups 100% of the Urabá banana producers and
70% of Magdalena banana producers. AUGURA represents 160 companies and 340
banana farms altogether. The other key operator is SINTRAINAGRO, which was created
in 1998 and represents 98% (18,999) of the agro-industry workers in Urabá of which 2,250
work in the Fairtrade-certified banana plantations. By the end of the last century, the first
Collective Bargaining Agreement in the Industry was signed between AUGURA and
SINTRAINAGRO, involving all members of the union and companies associated with
AUGURA, a unique case in the banana history of Latin America.22
In addition, hired
plantation workers formed Worker Committees and Corporations in each plantation when
Fairtrade entered the banana sector in Urabá. Each Corporation has a Joint Body,
comprising both hired-worker and management representatives, which administers the
Fairtrade Premium. In addition, the banana exporters have created foundations that support
the well-being of hired workers and communities in general, such as FUNDAUNIBAN
(UNIBAN Foundation), CORBANACOL, the Rosalba Zapata Cardona Foundation,
FUNDAFRUT, among others.
22
Quesada, V. H. What can we learn from the banana experience in Colombia? FLO. March, 2013.
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 21
The six smallholder cooperatives in Magdalena, all Fairtrade-certified, are
COOBAMAG, ASOPROBAN, EMPREBANCOOP, BANAFRUCOOP,
ASOBANARCOOP and COOBAFRIO), located in the towns of Zona Bananera and
Ciénaga. The main banana traders in Colombia and their respective export share (2012)
are: UNIBAN (42.5%), BANACOL (16.4%), BANASAN (11.3%), TECBACO23
(8.3%),
BANAFRUT (6.9%), Tropical (5.8%), Conserba (4.6%), and others (4.2%).24
In 2012,
82.2% of the Colombian banana was exported to the European Union.
Most of the bananas, including Fairtrade-certified fruit, exported to the European
Union from Colombia are sold in supermarkets; for example, 80% of bananas sold in the
UK are through supermarkets. This means that supermarkets hold considerable power over
their suppliers. Over the past few decades, the big UK supermarkets have cut prices of
bananas in efforts to compete for customers, and have priced bananas as loss leaders.25
In
general, there is a downward pressure on prices, production costs and workers’ wages in the
banana sector.
Several supermarket chains in UK and The Netherlands have decided to sell
Fairtrade bananas exclusively, which has resulted in increased consumer demand for
Fairtrade bananas. These supermarkets that sell only Fairtrade bananas are also playing the
price wars, although they also have Fairtrade minimum price and Premium commitments.
One of them has even been reported as using its considerable commercial clout to keep
Fairtrade minimum prices from increasing to reflect rising costs of production.26
The
downward pressure on banana prices is due not only to the aforementioned price wars, but
also to banana oversupply caused by the European Union trade liberalization and by new
banana-growing players. Therefore, the blame for poor, decreasing wages of workers in the
banana sector cannot be placed solely on plantation owners.
Fairtrade in the Colombian banana sector
Between 2009 and 2010, Colombia was reported as the country with the third
highest Fairtrade income, with approximately USD 62 million. The number of Fairtrade
certified banana farms in Colombia increased from 4 in 2007 to 35 in 2013. This increase
stems mainly from the opportunity offered by the supermarket chains in UK and The
Netherlands, which exclusively sell Fairtrade bananas. Both Colombia and the Dominican
Republic are the ones that benefit the most from that exclusivity. In the Urabá region,
according to Fairtrade International, there are 27 farms certified under the Fairtrade
Standard for Hired Labour, totaling 2,254 jobs. In 2012, Colombia exported 6.2 million
boxes of Fairtrade-certified bananas, which represents 35% of the world’s Fairtrade
bananas.
23
Baltime Techniques of Colombia S.A. 24
Augura, Coyuntura Bananera Colombia, 2012. 25
This means that bananas are sold at a low cost to attract customers who will buy other, more profitable
items. 26
www.bananalink.org.uk
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 22
Public Private Partnership (PPP) Programme
AUGURA and the Dutch Embassy in Colombia established a partnership several
years ago and have invested more than USD 5 million through the social foundations
CORBANACOL and FUNDAUNIBAN in the banana-growing regions of Colombia. The
following achievements in the Magdalena banana zone can be highlighted:
GlobalGap certification for smallholders so they can export
Infrastructure improvement in smallholder farms
Improvement of Fairtrade-sales processes
Improvement of the standard of living of smallholders and their family members
Social investment in education, sports, and cultural activities
The Armed Conflict
Since 1960, Colombia has experienced an armed conflict in which the main
protagonists are the army, leftist guerrillas and rightist paramilitaries (demobilized in
2006), and is currently conducting peace negotiations in Cuba. Both the Urabá and
Magdalena regions were seriously affected by this conflict.
In Magdalena, the leftist FARC (Revolutionary Armed Forces of Colombia) and
ELN (National Liberation Army) guerrilla groups were active in the period from 1980 to
2000 where they extorted and kidnapped mostly large-scale farmers and ranchers. In 1997,
rural insecurity increased, caused not only by the guerrilla groups but also by common
delinquents. In response, affected trade associations and landowners invited and funded
existing self-defense or paramilitary groups from neighboring regions to neutralize the
guerrilla and delinquency. Initially, these paramilitary groups acted as watchmen and
guards in rural areas, then initiated operations in urban areas, and soon were involved in the
murder of potential guerrilla fighters and their collaborators. After expelling the guerrilla
groups, the paramilitary units took military control and started to make alliances with local,
regional and national politicians. The objective was mostly to steal public funds. This
terror setting that endured until 2006 greatly harmed agricultural production in the banana
zone because many farmers abandoned their farms or could not visit them. The
government policy that promoted and facilitated paramilitary demobilization at that time,
coupled with the reactivation of the agricultural-based economy and the social investment
by the government and private sector, helped normalize the security situation again.
Fairtrade entry reinforced this economic and social recovery in the banana zone.
Violence in Urabá dates back to the beginning of the 20th century, when banana
workers struggled against terrible living and labour conditions inside the United Fruit
Company. In 1928, the government supported this transnational during a workers’ strike
and killed more than 3,000 banana workers.27
Although the United Fruit Company
disappeared in the Sixties and banana-production operations were handed to national
landholders, conflicts continued and several leftist guerrilla and political parties were
27
Revista Credencial Historia. Edición 190. October 2005.
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 23
formed and took control of the workers’ labour organizations. Urabá’s banana zone
became the center of revolutionary movements and the government responded with violent
repression. When the pacification efforts by the Colombian government failed in the
Eighties, mostly due to the FARC-ELP28
guerrillas, banana landholders (and with the
tolerance of Army chiefs in the region) supported and funded the so-called “Peasant Self-
Defense of Cordoba, and Urabá” paramilitary unit. The result was widespread violence and
the death of 8,000 people in less than seven years, of which 800 were union leaders and
members. In 1998, two labour unions merged to form SINTRAINAGRO, as a pro-peace
action group but also with the conviction that an economic reactivation in the region was
necessary to improve the living conditions of banana workers. After removing the army
commanders in Urabá, the army started to combat the paramilitary groups which soon
demobilized to take advantage of the amnesties offered by the government in 1991 and
2006. In retrospect, the pacification of Urabá depended not only on ending the armed
confrontation, but also on the reactivation of the banana sector, based on productivity and
respect for human and labour rights.
Current conflicts in Magdalena
Although it is not a generalized problem, in focus groups sessions with smallholders
and family members conducted as part of the impact study, it was discovered that some
members of ASOPROBAN are having conflicts with large landholders in the zone
(Cadavid and Vives), who are taking over water sources, and leaving smallholders
waterless. Some smallholders have been forced to sell their farms, and this seems to be a
landholder strategy to expand their plantations. Smallholders expressed their interest in
denouncing this situation to Fairtrade International, to obtain support in order to avoid, as
they put it, that “the small-scale farmer be crushed by the large farmer”.
28
ELP stands for Patriotic Liberation Army.
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 24
4. Characterization of Smallholders and their Cooperatives
This section first presents a brief overview of each of the six Fairtrade-certified
cooperatives in Magdalena that were part of this study. It summarizes the main
socioeconomic characteristics of the cooperatives and their members, investment of the
Fairtrade Premium and highlights important differences among the cooperatives.
4.1 Cooperatives: location and history
In Colombia there are six Fairtrade-certified banana cooperatives, all of whom were
evaluated in this impact study: COOBAMAG, ASOPROBAN, EMPREBANCOOP,
BANAFRUCOOP, ASOBANARCOOP and COOBAFRIO, all located in the towns of
Zona Bananera and Ciénaga in the Magdalena Department (see Figure 1). They are
located in the middle of two strategic ecosystems, the Sierra Nevada de Santa Marta and the
lake complex Ciénaga Grande of Santa Marta. The cooperatives are dedicated to the
production and processing of bananas for the international and domestic markets, and they
also provide members with services such as training, credit, input-buying unions, air
fumigation, quality control and supervision of Fairtrade-norm compliance.
Figure 1. Geographical location of the Fairtrade banana smallholder organizations
under study
Cooperative A was constituted in June 1997 as an initiative of a group of 28 small-
scale banana producers in the town of Zona Bananera in Magdalena, who had suffered a
negative experience due to the inadequate financial management of their previous
association. It has been linked to an exporter since February 2011 and obtained GlobalGap
and Fairtrade certification in 2007 and 2008, respectively. Five full-time employees (three
women and two men) work in its offices.
Zona Bananera
Ciénaga
Departament of
Magdalena
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 25
Cooperative B was constituted in December 1984 by 28 members who sold their
fruit to a local trader and started its commercial relationship with another major exporter.
In 1998 it became a cooperative, obtained Fairtrade certification and started to export
directly to the European market after signing a contract. In 2006, the smallholder
organization became insolvent, ceased exports and did not comply with the contract. This
was mainly due to a profound economic crisis, mismanagement and the serious security
situation and social emergency in the region. In 2008, thanks to the support from a major
exporter, through fertilization and air fumigation subsidies, the cooperative started the
recovery of its members’ banana farms. In week 45 of 2008, banana sales were reactivated,
but the name of another legal organization was used, because of the high debt level. The
cooperative continues with the process of organizational and business recovery.
Cooperative C was founded in March 2010 by 35 smallholders who were
producing 3,000 boxes weekly. Before this, they had initiated an organizational process
through an EAT29
but with no success. It has been linked to an exporter since 2010 and
received GlobalGap and Fairtrade certification in November 2010 and July 2011,
respectively. Six full-time employees (four men and two women) work in its offices.
Cooperative D was established in March 2007 in the city of Santa Marta, an
initiative of the smallholders with less than 10 hectares. It has been affiliated to an exporter
since 2007 and obtained GlobalGap and Fairtrade certification in 2008 and 2009,
respectively. Ten full-time employees (seven men and three women) work in its offices.
Cooperative E was constituted in November 1987 as an association with 16 farms
that started selling through an exporter, and became a cooperative in 2002. It has had
GlobalGap and Fairtrade certification since 2007 and 2006, respectively. Five full-time
employees (three men and two women) work in its offices.
Cooperative F was founded by smallholders in December 1999. When a local
trader closed its operation, the smallholders were left with no alternatives for selling their
fruit. The cooperative experienced administrative problems when selling conventional
bananas, which almost led to its closure in 2003, when only 15 members remained. During
the years 2009 and 2010, it was reactivated thanks to its relationship with another exporter
and started the Fairtrade certification process. Thanks to the Fairtrade Premium, the
cooperative started a process of organizational and business strengthening. The cooperative
started selling Fairtrade fruit in week 13 of 2011, with 3,303 17-kg boxes. It obtained
GlobalGap and Fairtrade certification in 2010 and 2011, respectively. Nine employees
(five men and four women) work full-time in its offices.
29
Associative Work Enterprise.
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 26
4.2 Basic characterization of cooperatives
This section describes social and economic aspects of the six cooperatives and
points out the major differences among them.
Socioeconomic information
Table 3 presents key basic socioeconomic information (year 2012) of the six
cooperatives and their members. Some aspects are highlighted below. Farm areas vary a
lot, from a minimum of 0.3 hectares to a maximum of 16; annual household incomes show
a great variation (from USD 2,393 to USD 60,245) as well as annual per capita incomes
(USD 464 to USD 18,640). These figures illustrate that cooperative membership is diverse,
a blend of farmers with a wide range of incomes, including some who are living in poverty.
The average farm area in Cooperative D is 71% larger than the average for all six
cooperatives; its members also boast average schooling that is 50% above the average for
all six cooperatives; and the average annual household income of its members is 62%
higher than the average for all six cooperatives. This clearly indicates that Cooperative D
has an important segment of members that has a much higher standard of living than the
most of the members of the other cooperatives. In addition, the average age of all
smallholders is 47, but it’s 60 years for Cooperative E members. Annual average
cooperative banana yields range from 30-38 tons/hectare.
It is important to note that Table 3 presents net income (not gross income) from total
banana sales (Fairtrade and non-Fairtrade) and so the respective production costs have been
subtracted. However, this information was obtained directly from smallholders and the
interviewers had to quickly guide the step-by-step calculation. Accuracy of the information
collected depends on the ability of each smallholder to recall the volume of bananas sold,
production costs and other expenses incurred related to cooperative membership. The
CODER research team considers that the value of the latter deductions tended to be
exaggerated, and thinks that net incomes from banana sales were somewhat
underestimated.
It is important to note here that although the minimum price for a Fairtrade-certified
banana box in 2012 was USD 6.70, in fact 20% of the total banana volume was sold in the
conventional market at a heavy discount. CODER calculates that the net income obtained
by individual smallholders from total banana sales ranges from 35-45% of gross income.
The average annual net income from bananas for 2012 presented in Table 3 (USD 13,068)
is approximately twice Colombia’s minimum legal salary.
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 27
Table 3. Basic socioeconomic aspects of the six cooperatives and their members,
annual information for year 2012 (USD)
Information COOP A COOP B COOP C COOP D COOP E COOP F Total or
Average
# members 40 80 59 35 44 42 300
Total hectares 117.0 216.0 161.4 195.0 135.5 137.4 962.3
Average has/member 2.93 2.70 2.74 5.57 3.08 3.27 3.21
Largest farm area 10 16 11 16 8.5 10.3 12
Smallest farm area 0.5 0.3 0.8 1.0 0.7 0.8 0.6
Total boxes sold 181,946 428,567 351,809 353,326 284,396 268,180 311,371
% boxes sold on
Fairtrade terms 93% 72% 78% 84% 73% 86% 80%
Average annual yield
(ton/ha) 30.0 34.1 38.0 30.9 36.0 33.0 34.1
Average age of
members 41 41 51 51 60 41 47
Average years of
schooling of members 8 7 8 12 7 9 8
Average # of
members in hh 5 6 5 5 6 6 6
% of members with
food security 84% 68% 77% 88% 88% 70% 77%
Average annual hh
income 16,548 14,735 13,426 26,249 15,859 15,137 16,284
Maximum hh income 32,393 49,080 49,767 50,753 42,476 60,245 47,780
Minimum hh income 3,904 2,393 5,220 5,187 4,176 4,495 4,032
Average per capita
income 3,868 3,176 2,819 6,204 3,893 4,057 3,782
Maximum per capita
income 11,712 10,485 12,442 16,650 18,640 16,241 13,755
Minimum per capita
income 465 791 746 1,037 464 694 706
Average net income
from bananas 13,863 11,862 11,265 20,987 11,353 12,336 13,068
Maximum net income
from bananas 30,117 42,270 49,767 49,671 39,041 40,167 42,219
Minimum net income
from bananas 3,012 2,142 2,030 4,350 2,320 2,900 2,626
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 28
Table 4 shows the penetration of basic services in the homes of cooperative
members. It highlights that household access to health services is high, although
smallholders mentioned that the SISBEN (national subsidized health service system) and
EPS (national non-subsidized health service system) services were mediocre; in focus
group sessions with smallholders and family members, they mentioned that the health
centers in their communities lack the adequate conditions for addressing an emergency
properly. SISBEN health services, targeted at poor people, are mostly free of charge,
whereas the cost of EPS services depends on the member’s income. Access to basic
sanitary services in households is also high, but the availability of drinking water is still
low, because water usually comes from natural wells, some of which are contaminated.
These results suggest that cooperative managers could explore practical ways to improve
health services and access to drinking water with Fairtrade Premium and/or government
funding.
Table 4. Percentage of smallholder households from banana cooperatives with basic
services
Services COOP A COOP B COOP C COOP D COOP E COOP F Average
% with health
services 100% 100% 100% 97.1% 100% 100% 99.6%
% with SISBEN 64.5% 56.1% 72.1% 23.5% 19.0% 39.4% 48.9%
% with EPS 35.5% 43.9% 27.9% 73.5% 81.0% 60.6% 50.6%
Distance to
health center
(km)
1.8 2.0 1.7 8.8 2.3 5.0 3.4
% with water
from a natural
source
87.1% 84.2% 93.0% 79.4% 42.3% 57.6% 77.0%
% with treated
water 12.9% 15.8% 7.0% 20.6% 57.7% 42.4% 23.0%
% with WC 71.0% 78.9% 95.3% 94.1% 96.2% 100% 88.2%
% with latrine 41.9% 33.3% 14.0% 17.6% 7.7% 3.0% 21.1%
% with sewage 71.0% 75.4% 72.1% 85.3% 92.3% 75.8% 77.6%
% with cement
floor 96.8% 95.5% 97.7% 100% 100% 97.0% 97.5%
% with garbage
disposal 96.8% 100% 100% 97.1% 100% 100% 99.1%
% with insect
control 74.2% 89.5% 88.4% 70.6% 73.1% 60.6% 78.5%
Cooperative differences
The most prominent differences between the six cooperatives are presented below,
which are important to note. Cooperative A exhibits the highest agricultural
diversification index, its members are the most interested in expanding their crops, and it
presents the highest percentage of members with a motorcycle. On the other hand, it
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 29
presents the highest index of informal sources of credit, has a segment of members with the
lowest annual per capita income, the lowest penetration of WCs in households, and the least
number of permanent hired-workers with contracts. It is also the cooperative with the
lowest proportion of female members.
Cooperative B has the lowest food security index (68%) versus an average of 78%
for all six cooperatives. It is also the organization whose members rate it below the average
for all six cooperatives with respect to sharing costs and risk with its members,
transparency in operation, service provision and support to members by means of
agricultural assets.
Cooperative C has members with the lowest average annual per capita income, the
greatest proportion of members affiliated to SISBEN, its members hire the least number of
permanent workers, and it shows one of the lowest agricultural diversification indexes. It is
also one of the organizations with the least number of female members.
Cooperative D has members who on average belong to a higher socioeconomic
stratum than the members of the remaining cooperatives, reflecting higher per capita
incomes, greater access to EPS and other basic services, superior vehicle ownership and
savings capacity. It is also the cooperative with the largest proportion of female members
(31% versus an average of 19% for all six cooperatives).
Cooperative E is the cooperative where women are most important in terms of
income generation, exhibits a high EPS access level, the greatest savings value among
members who save money, and shows large Fairtrade- and GlobalGap-related investments.
On the other hand, its members live the farthest away from health centers, have the lowest
number of loans from formal banks, exhibit the lowest income and agricultural
diversification levels, and it has a segment of members with the lowest per capita incomes.
Cooperative F is the cooperative that made the greatest Fairtrade and GlobalGap
certification-related investments in 2012, all of its members have a WC, boasts an above-
average agricultural diversification level, and has the least proportion of households with
relatives who have migrated. However, it also shows the lowest food security level and
only 64% of its members save money.
4.3 Banana sales volumes, sales prices and production costs
Banana sales volume
Table 10 in Section 5.1 of this report shows total volume of banana boxes sold by
cooperatives in the last three years, including the percentage sold on Fairtrade terms.
As already mentioned, four of the six cooperatives increased total banana sales volume in
this time period and five of the six cooperatives also increased their volume sold on
Fairtrade terms. The average percentage volume of bananas sold on Fairtrade terms
increased from 71% in 2011 to 80% in year 2012.
Figure 2 displays the average annual banana production per farm (tons/year) in the
cooperatives of Magdalena from 2010 to 2012. The average annual volume of bananas
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 30
sold on Fairtrade terms across all cooperatives was 49 tons in year 2010, 61 tons in 2011
and 93 tons in 2012, or an increase of 52.4% in the last two years. Cooperative D has the
highest annual average farm production, 159 tons, because its members have the largest
farms, tend to have higher incomes and more schooling, which allows them to invest more
in banana production.
Figure 2. Average annual banana production per farm (tons/year) in the
cooperatives of Magdalena (2010-2012)
Figure 3. Average banana yield (tons/ha) per cooperative (2012)
Figure 3 shows the average banana yield (tons/ha) of cooperatives in 2012; this data
was provided by cooperative managers. The average yield according to managers last year
was 34.1 tons/ha, and Cooperatives C and E show the highest yields. The average yield of
0
50
100
150
200
COOP. A COOP. B COOP. C COOP. D COOP. E COOP. F
2010 60 56 125 72
2011 51 63 20 134 77 48
2012 101 80 90 159 75 81
0
5
10
15
20
25
30
35
40
Ton
s
COOP. A COOP. B COOP. C COOP. D COOP. E COOP. F
2012 30 34 38 31 36 33
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 31
non-Fairtrade farms surveyed was 10-15% lower than in Fairtrade farms. On the other
hand, data collected directly from smallholders point to higher yields; the average in year
2010 was 29 tons/ha, 30 tons/ha in 2011, and 37 tons/ha in 2012. However, it is considered
that this data is somewhat exaggerated, because smallholders surveyed had to recall the
average amount of boxes they sold per week. Hence, it is recommended to use the official
yield data offered by the managers.
Cooperatives sell an average of 94% of their banana production to exporters, 4% to
buyers in the local market, and 2% is given away to hired workers or consumed by
household members. An average annual Fairtrade banana sale per cooperative was USD
727,000 in 2010; 1,357,000 in 2011; and 1,964,000 in 2012. Figure 4 shows the income
per cooperative from sales of bananas sold on Fairtrade terms in the last three years.
Figure 4. Cooperative income from sales of banana sold on Fairtrade
terms, 2010-2012 (USD)
Table 5 shows annual banana sales to the conventional export market per
cooperative from 2010-2012. Cooperative-reported average annual banana sales to the
conventional export market were USD 586,554 for year 2010; USD 309,485 in 2011; and
USD 128,277 during 2012.
COOP. A COOP. B COOP. C COOP. D COOP. E COOP. F
2010 682,372 518,793 - 2,061,938 1,753,309 -
2011 596,206 1,650,407 687,805 2,564,228 1,718,157 1,080,217
2012 1,136,085 2,496,375 1,926,938 2,433,910 1,799,777 1,569,994
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 32
Table 5. Annual banana sales to the conventional export market per
cooperative, 2010-2012 (USD thousand)
Figure 5 displays net income for cooperatives from 2010-2012. Total average net
income per cooperative last year was USD 393,000; Cooperatives A, C, and F exhibited the
highest incomes.
Figure 5. Net income for cooperatives, 2010-2012 (USD)
Sales price of bananas
Smallholders negotiate prices as EXW.30
The minimum EXW price defined by
Fairtrade International31
for bananas is USD 6.70 and the FOB32
price is USD 9.10 per
30
The acronym EXW (Ex-Works) is an international trade clause that means, in this context: “the seller will
place the product in the cooperative plant or banana plantation”. Bananas have to be packed and labeled by
$0,000
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
COOP. A COOP. B COOP. C COOP. D COOP. E COOP. F
2010 $591,848 $57,702 $0 $316,750 $323,981 $203,282
2011 $500,813 $202,168 $248,780 $333,333 $337,669 $311,111
2012 $478,528 $302,287 $426,659 $355,828 $379,810 $470,759
Cooperative 2010 2011 2012
Cooperative A 273,690 433,062 77,524
Cooperative B 940,709 462,331 105,968
Cooperative C 0 41,734 38,483
Cooperative D 552,144 7,046 117,122
Cooperative E 294,336 272,087 184,049
Cooperative F 1,370,037 569,648 294,479
Weighted average 586,554 309,485 128,277
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 33
18.14-kg box of Fairtrade bananas. All Fairtrade-certified banana smallholder
organizations receive a USD 1.00 additional Fairtrade Premium for each box sold on
Fairtrade terms for investment in production and community/social development. An
important finding of the study is that the current Fairtrade minimum price does not leave a
margin for profitability, mainly because of the dollar fluctuation and the high costs of
banana production. Respondents perceive that the real Fairtrade benefits are the Premium,
price stability and market assurance.
Most smallholders and managers surveyed know what the current price is for a box
of bananas for the Fairtrade and conventional export markets. However, some smallholders
offered irregular data, and for this reason this report uses official information reported by
the cooperative managers. The current average price that a banana cooperative receives for
a box of Fairtrade bananas is USD 7.24 and in the conventional market the price is USD
6.96.
Table 6 shows the detailed sales price of a box of bananas per cooperative. It
should be clarified that the prices for a box of bananas from Cooperative A are different
because of its particular terms of negotiation with the exporter.
Table 6. Current sales price of a box of bananas for Fairtrade and
for the conventional export market (USD)
Cooperative directors believe that value distribution along the banana value chain
should be more transparent, and that smallholders should have greater bargaining power
with the buyers, and they expect support from Fairtrade in this sense.
the seller, but the buyer has to cover all subsequent expenses after product delivery, including loading the
product into the ship. 31
Table of Fairtrade minimum prices and Premium, Version 2013. 32
FOB stands for “Free On Board”, and is always used in conjunction with a port of loading. The seller pays
for transportation of the goods to the port of shipment, plus loading costs. The buyer pays subsequent costs,
such as marine freight, transport, insurance, unloading, and transportation from the arrival port to the final
destination. 33
The current (year 2013) Fairtrade sales price for five of the six cooperatives is above the minimum price
because one of the buyers unilaterally increased it. 34
Average annual price for a 20-kg box. The price was USD 7.27 in Semester I and USD 6.27 in Semester II. 35
The Fairtrade box has 17.5 kg, whereas the conventional box has 20 kg.
Cooperative Fairtrade33
Conventional
Cooperative A 6.60 6.60
Cooperative B 7.26 6.50
Cooperative C 7.26 6.7734
Cooperative D 7.34 7.13
Cooperative E 7.63 7.26
Cooperative F 7.26 7.2935
Weighted average 7.24 6.96
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 34
Smallholders surveyed expressed their dissatisfaction with the current price,
because it was not raised in 2013, which evidences their lack of knowledge of Fairtrade
policy that established, in October 2012, that the minimum price would be revised every
two years.36
Nevertheless, in the case of one of the exporters, the purchasing price for year 2013
was raised within the minimum–maximum price range, a situation that did not occur with
another exporter that has not raised prices for two years now. In spite of this, it was
detected that Cooperative A members are satisfied with their commercial relationship with
this exporter, as the buyer has supported them in times of crisis, the one-year trade contract
was signed by the cooperative and not by the smallholders, and it has provided support to
smallholders in terms of technical assistance, certification processes and transportation of
inputs.
Costs of production
This impact study revealed that few of the actors in the banana value chain really
know what the costs of production are for a box of bananas. Production cost information
for this report was obtained directly from cooperative managers, who did mention that the
current Fairtrade minimum price was not fully covering the cost of production for bananas.
Table 7. Current (2013) cost of a box of bananas for Fairtrade and for the
conventional export market (USD)37
36
Reference document for Fairtrade partners. Review of the price for bananas 2013. Page 6. 37
All exporters mentioned that they did not have precise information on the banana production costs for
smallholders. Thus, data on banana production costs were supplied by cooperative managers but it seems that
they lack a uniform method for calculating these. 38
Yield data provided by both managers and smallholders is inconsistent. Yield data shown are CODER
estimates after analyzing yield data in boxes and tons obtained from several sources during the study.
Confusions may arise because bananas are sold in boxes with four different weights, ranging from 17 to 20
kgs. 39
In this cooperative, the production cost for the conventional market is greater because the box sold in this
market contains more fruit.
Cooperative Fairtrade Conventional Yields (ton/ha),
201238
Cooperative A 7.88 7.88 30
Cooperative B 6.00 6.20 39
34.1
Cooperative C 7.25 7.25 38
Cooperative D 7.26 7.26 30.9
Cooperative E 8.64 8.64 36
Cooperative F 7.25 7.25 33
Weighted average 7.21 7.26 34.1
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 35
Table 7 shows current (2013) costs of production and yields (tons/ha) per
cooperative for year 2012. The cost of production of a box of bananas is the same for the
Fairtrade and conventional export markets, except for Cooperative B (please see footnote
38). The current production cost of a box of Fairtrade bananas is on average USD 7.21
(approximately COP 12,927), similar to the cost for the conventional market (USD 7.26).
Of the cooperatives studied, Cooperative E had the highest cost of production; both
for the Fairtrade and conventional markets, the cost is USD 8.64, or COP 15,492.
Managers mentioned that the University of Magdalena advised them on how to calculate
production costs correctly. It cannot be discarded that some cooperatives are making
methodological errors when calculating production costs.
As already mentioned, cooperative managers asserted that the sales price does not
fully cover production costs, and they also mentioned that when calculating variable or
direct costs, they sometimes excluded the cost of the smallholder’s labour, nor did they
consider the full cost of fertilizers, fuel or agricultural activities such as “recaba and
trincheo”, the latter costs partially or fully covered by Fairtrade Premium funds.
Furthermore, they also sometimes exclude fixed or indirect costs such as administrative
expenses.
The following is a list of investments and costs of production subsumed by
smallholders:
Investment in the crop and infrastructure, such as land preparation, drainage,
planting, irrigation systems and cableways
Costs of washing, disinfection and packaging
Cost of transportation of boxes to the port, although this amount is reimbursed by
the buyers40
Port charges (USD 0.40 per box)
Costs of crop agronomic and maintenance practices (irrigation, manual weeding,
disease control, fertilization, crop maintenance, and drainage cleaning)
Costs of harvesting and packing material (glue, coding ink, pallet)
Fixed or indirect costs, such as Fairtrade-norm maintenance and administrative
expenses
One of the exporters covers packing inputs and ship loading, but does not pay
transport to the port, which it should, because it is selling on EXW terms. For example, it
charges the cooperatives USD 0.40 for transporting each box to the port. In addition, it
provides services like credit, technical assistance, input supply, air fumigation for Black
Sigatoka control and social support to smallholders. Likewise, the other exporter transports
inputs to the Cooperative A warehouse and bananas to the port, provides backstopping with
respect to quality control and management of Fairtrade and GlobalGap certification,
40
Some cooperative managers said that one of the exporters does not reimburse this cost, which means it is
not complying with EXW terms of sale.
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 36
supports projects for improvement of farm infrastructure, sells and distributes inputs such
as fertilizers, plastics, packages, and air fumigation for Black Sigatoka control.
According to managers, in 2012 cooperatives invested an average of USD 30,927 to
comply with Fairtrade and GlobalGap requirements. It should be underlined that
smallholders do not differentiate between Fairtrade and GlobalGap expenses. Table 8
presents the approximate amount of investments and expenses, the Premium amount
received, and net incomes for the Magdalena cooperatives in year 2012.
Table 8. Investment and approximated expenses, value of the Premium and net
income of cooperatives in Magdalena, 2012 (USD)
Cooperative Fairtrade
certification-related
investments
GlobalGap
certification-related
investments
Fairtrade
Premium amount
received
Net
income
Cooperative A 7,100 9,838 305,187 478,533
Cooperative B 1,980 9,286 246,107 302,560
Cooperative C 9,593 14,389 255,304 426,531
Cooperative D 5,165 12,052 204,685 355,934
Cooperative E41
57,513 - 239,041 379,782
Cooperative F 43,157 32,002 358,438 480,608
4.4 The Fairtrade Premium concept and its investment
Fairtrade is working with a minimum price for certified banana boxes, which was
USD 6.70 EXW or USD 9.10 FOB in 2012. In addition, there is a Fairtrade Premium.
This is an extra payment of USD 1.00 per box of Fairtrade bananas42
that is made to the
cooperatives upon sale of each box under Fairtrade terms. This additional payment has to
be invested in the economic, social and environmental development of the organizations
and community.
Fairtrade International is the agency in charge of defining the Premium value, a sum
that is not negotiable and ranges from 5-30% of the minimum price, depending on the
agricultural product involved, and is paid per each unit of product sold.43
Therefore, when
consumers buy Fairtrade products, they are contributing to increased incomes for
smallholder organizations.
The investment of the Fairtrade Premium is decided according to criteria and needs
as defined by the organizations themselves. Nobody can impose how to invest it, although
41
The cooperative does not separate investments related to Fairtrade or other certifications (mainly
GlobalGap). 42
Table of minimum prices and Fairtrade premium. Version 2013. 43
http://www.fairtrade.net/price-and-premium-info.html
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 37
Table 9. Fairtrade Premium received and investment distribution in the six
cooperatives, 2012 (USD)
Cooperative Project % Premium
Coop A
Investment in farms (irrigation, recaba44
, trincheo45
, fuel and motors 30
305,187
Education 20
Training 20
Audits 20
Others 10
Coop B Decrease in prices of fertilizers and improvement of processing plant 50
246,107 Social activities and certification 50
Coop C
Construction of cooperative headquarters 40
255,304
Fertilization programme 30
Certification 5
Education Committee 5
Social Welfare Committee 5
Solidarity Committee 5
Housing and Health Committee 7
ASOCOOMAG fee 3
Coop D
Financing cooperative administration 40
204,685
Irrigation project (18 smallholders with GAP) 15
Productivity 12.5
Solidarity Committee 9
Certification 8.4
Planting of noble weeds programme for environmental balance 7.35
Social investment 5.75
Committee of Education and Transportation 2.8
Coop E
Certification and internal and external audit 38
239,041
Infrastructure and irrigation 35
Emergencies and events 15
Cultural activities 3.5
Social investment and Education Committee 7.5
Solidarity and Social Welfare Committee 5
Coop F
Improvement of productivity 44
358,438
Certification 18
Debt guarantees 10
Support for hired workers’ social security 12
Administrative support 5
Social Welfare Fund 4
Education Fund 4
ASOCOOMAG fee 3
44
Elimination of water deposits in banana plantations to avoid fungi and lower the relative humidity 45
Soil perforation around the plant to facilitate the absorption of water, oxygen and fertilizers.
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 38
it is required that project selection and handling of funds “be conducted by means of
processes that are transparent, participatory and democratic”. Projects can promote the
development of the community or of the pertinent business at hand. The six cooperatives
studied in Magdalena assess their needs, analyze how to best employ the funds, make
proposals, and then vote in the General Assembly to prepare the annual Premium plan or
budget, a document that has to be approved by all of their member smallholders.
Table 9 shows the Fairtrade Premium received in 2012 and its budget distribution
for the six cooperatives. It confirms the independence of cooperatives when distributing
the Premium budget; for example, Cooperative C spent 40% of the Premium in the
construction of its headquarters and Cooperative B invested 50% in social activities.
On average, all of the cooperatives invested the Premium in the following way in
2012: 35% to improve farm productivity; 15% to cover administrative costs (although it’s
hard to make an accurate estimate because administrative expenses are sometimes ‘hidden’
in other budget items); 12% for audits and Fairtrade compliance; 10% for social welfare;
7% for emergency funds for households; 6% for building cooperative headquarters or
offices; 5% for education; 3% to fund ASOCOOMAG (a second-order organization
recently founded by the smallholder cooperatives in order to promote their commercial
activities); and 7% for other items (funding of social benefits for hired workers, debt
payment, training, cultural events, etc.). See Figure 6.
Figure 6. Average distribution of Fairtrade Premium by the six cooperatives (2012)
Improvement of farm productivity
(35%)
Funding administrative
costs (15%)
Audits and FT norm
maintenance (12%)
Social welfare (10%)
Emergency funds (7%)
Office building (6%)
Education (5%)
ASOCOOMAG fee (3%)
Others (7%)
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 39
It is important to highlight the strong relationship between Fairtrade impact in the
banana chain at the household, cooperative and community levels with the Premium
investment. For example, on average, 35% of the Fairtrade Premium is invested in
enhancing ‘farm productivity’ (lowering the cost of inputs such as fertilizers and fuel, of
on-farm infrastructure such as drainage and irrigation, and of key on-farm agricultural
activities). This strategy is a direct response to the general assertion by smallholders and
managers that the cost of producing bananas is equal or higher than its sales price. In other
words, a significant part of the Premium is being used to lower the cost of banana
production in the smallholder farms, which in turn is raising the smallholder household
income, a key Fairtrade impact. In addition, an estimated 15% or more of the Fairtrade
Premium is spent to cover administration costs of the cooperatives, because cooperatives
lack sound business models to cover all or most of their administrative costs.
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 40
5. Impact of Fairtrade on Cooperatives
5.1 Socio-economic impact of Fairtrade on smallholder households
Smallholders’ household income and standard of living
All of the smallholders surveyed said that their affiliation to Fairtrade had resulted
in an important increase in their annual household income. The average increase calculated
was 34%46
, ranging from 7-64%. 96% of the smallholders affirmed that their economic
situation had improved since joining Fairtrade.
The average annual smallholder’s household income in 2012 was USD 16,280
(USD 1,357 per month), and the annual average per capita income was USD 3,781. It
should be noted that many smallholder households receive additional non-agricultural
incomes from other jobs, pensions, own business, and others. In 2012, the average annual
net income from bananas reached USD 13,06847
, fluctuating from an average minimum of
USD 2,621 to an average maximum of USD 42,214.48
This income from bananas
represented on average 83% of total household income, oscillating from 23-100%.
This income level allows many smallholders not only to maintain and replace tools
and means of production, but also to make investments and save money. On average, 85%
of the households save an average of USD 1,729 annually, which represents 11% of total
annual household income. In the focus group sessions, smallholders mentioned that all
cooperatives encourage, and sometimes require, that members save money, an amount that
is generally deducted from weekly payments for banana sales.
Increases in household income from sales of Fairtrade bananas come from two
sources. The first source is the minimum price (USD 6.70 EXW or USD 9.10 FOB in
2012), a Fairtrade tool that seeks to provide greater stability to smallholders in case of
market fluctuations and to guarantee that their banana production cost is covered.49
This
price results in additional income due to the higher price of bananas in the Fairtrade
channel versus the conventional market; the price difference is low the first semester but
increases substantially in the second semester of each year. Price decreases in the second
semester in the conventional market are a result of the lower demand for bananas in Europe
at this time of the year. In 2012, each cooperative member sold an average of 5,114 boxes
of Fairtrade bananas.
46
This percentage was obtained by calculating the annual smallholder household income (agricultural and
non-agricultural) and then asking respondents what they thought their annual household income would be if
they were not affiliated to Fairtrade. As is obvious, Fairtrade mostly affects agricultural income. 47
As previously mentioned in this report, the CODER research team thinks that this figure is undervalued by
approximately 15%. 48
Net income from banana sales has such a wide range because farm areas and yields differ a lot, and some
smallholders have suffered climatic-related emergencies. 49
The minimum price is only a guide for buyers, and should not become the absolute price for buyers.
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 41
The second source is derived from the Fairtrade Premium, which is transferred to them in
the form of farm improvement and yield increases, lowering of banana-production costs
(inputs, manual labour, drainage, irrigation, etc.), and health and educational aid.
Table 10 shows the percentage of banana boxes sold on Fairtrade terms by
cooperatives, 2010-2012. These cooperative sales allow smallholders to capture the
aforementioned Fairtrade benefits derived from the minimum price and Premium. Four of
the six cooperatives (Cooperatives A, B, C and F) have increased their total banana sales
volume in the period 2010-2012, whereas Cooperatives D and E display a minor decrease.
All cooperatives show an increase of banana volume sold on Fairtrade terms except for
Cooperative D. The average percentage volume of bananas sold on Fairtrade terms
increased from 71% in 2011 to 80% in year 2012, with variations from 72–93% in the latter
year.
Table 10. Percentage boxes sold on Fairtrade terms by cooperatives, 2010-2012
Coop
2010 2011 2012
Total
boxes
sold
Boxes
sold as
FT
%
Total
boxes
sold
Boxes
sold as
FT
%
Total
boxes
sold
Boxes
sold as
FT
%
Coop A 151.850 97.183 64% 159.990 87.665 55% 181.946 169.202 93%
Coop B 251.935 96.989 38% 91.728 84.552 92% 428.567 308.568 72%
Coop C N/A N/A N/A 278.963 101.809 36% 351.809 276.110 78%
Coop D 358.763 264.801 74% 329.412 281.668 86% 353.326 297.685 84%
Coop E 315.844 269.817 85% 302.853 255.774 84% 284.396 206.877 73%
Coop F 227.442 N/A N/A 199.237 152.130 76% 268.180 229.396 86%
Total boxes/Average % 1.362.183 963.598 71% 1.868.224 1.487.838 80%
Regarding their standard of living, 98% of smallholders consider that their quality
of life has improved since joining Fairtrade. All cooperative members, thanks to the
Fairtrade Premium, have received loans to buy household appliances and also quality
technical assistance; 90% received agricultural inputs, 75% obtained credit for family
education and 8% received credit to buy a house.
All smallholders have access to health services, 49% to SISBEN and 51% to EPS.
On average, health centers are 3.4 km away from smallholders’ homes. 77% of the
members get their water at home from natural wells, whereas 23% have drinking water
because they live in a village.50
88% of the members have a WC in their homes, 21% have
a latrine, 78% have sewage, 98% have a cement floor, 99% have garbage disposal, and
79% control insects (see Table 4). 45% of the Fairtrade households have children aged 6-
12 years and 99% of them go to school. Additionally, Fairtrade smallholders enjoy more
access to training than non-Fairtrade smallholders.
50
Smallholders live either in their farm, in a village near their farm, or have houses in both places. Some
towns have drinking water, but natural wells are common in both towns and farms.
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 42
Table 11. Asset ownership level among banana cooperative members (%)
On average, members declared that they had increased household assets by 30%
since joining Fairtrade, with a range of 4-73%. Table 11 describes ownership levels of
assets such as household appliances and vehicles in cooperative member households. To
compare, the corresponding average data for Colombia is presented. It can be observed that
ownership levels in smallholder households is above the national average, according to the
National Administrative Department for Statistics (DANE) Survey of Quality of Life
(ECV), a situation that confirms that Fairtrade has improved smallholders’ quality of life.
In addition, 76% of members improved their house and basic services in the last
three years, mostly floors (41%), roofs (32%), WC (30%), kitchen (28%), household assets
(17%) and others (51%, including walls, sidewalks, home expansion, etc.), with an average
investment of USD 2,231 per house. In contrast, none of the non-Fairtrade smallholders
had improved their houses in the last three years.
Fairtrade has improved the standard of living of smallholder households in three
main ways. Firstly, sales of Fairtrade-certified bananas at the minimum price has increased
household income, enabling basic housing improvement, the purchase of key household
appliances, and improved access to non-subsidized health services and to education for
children and youngsters. Secondly, the investment of the Fairtrade Premium in services for
smallholders has also facilitated basic housing improvement, the purchase of key household
appliances, and better access to medicine, education, training and emergency funds.
Thirdly, more than one-third of the Fairtrade Premium is being invested in on-farm
51
Source: DANE ECV 2011 – ECV 2012. Data expanded with population projections, based on the 2005
Census results. 52
Press release DANE: “Basic information and communication technology indicators/Use and penetration of
TIC in households and persons aged 5 or more, Bogotá, D. C., 25 March 2009.
Assets Coop A Coop B Coop C Coop D Coop E Coop F Average
Country
average51
% with
radio/sound
equipment
83.9% 68.4% 67.4% 70.6% 88.5% 72.7% 73.5% 47.9%
% with TV 100% 100% 100% 100% 100% 100% 100% 91%
% with cell-
phone52
93.5% 94.7% 100% 97.1% 100% 100% 97.3% 83.8%
% with bicycle 80.6% 77.2% 81.4% 52.9% 69.2% 66.7% 72.5% N.A.
% with
motorcycle 74.2% 47.4% 41.9% 50.0% 11.5% 60.6% 47.9% 20.6%
% with
refrigerator 80.6% 96.5% 90.7% 91.2% 100% 94.0% 92.5% 78.7%
% with vehicle 6.5% 8.8% 4.6% 14.7% 64.9% 24.3% 17.3% 13.7%
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 43
productivity and reduction of production costs, which also impacts positively on
smallholder household income.
Food security
As already mentioned, 77% of the members said that they did not have food security
problems in their household. It should be noted that green bananas is a staple food in the
region and there are many recipes, which possibly facilitates food security. Additionally,
most farms have fruit trees and other minor crops for self-consumption, and in some cases,
for selling. Food security means that there is access to an adequate amount of food, which
can be produced on-farm or can be purchased. As already mentioned, smallholders said
that their affiliation to Fairtrade had resulted in a 34% income increase, which of course
facilitates the purchase of food to guarantee food security.
However, although the average monthly per capita income for a farmer household is
USD 312, it ranges widely; from USD 61 (quite low) to USD 1,143, and 23% of the
surveyed households suffer from food insecurity. These households are generally those
with less per capita income because they own less land, have more household members,
and their income depends more on banana sales, since they are less diversified. There is no
official food security data for the Magdalena Department but it is highly probable that food
insecurity levels in non-Fairtrade-linked rural population segments are much higher.
Fairtrade certification-related investment
In the last three years, 92% of the smallholders made Fairtrade and GlobalGap
certification-related investments averaging USD 5,00053
, mostly for improving the on-farm
53
Smallholders do not differentiate between Fairtrade and GlobalGap certification.
Smallholder and hired worker in a
banana-growing farm in Magdalena
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 44
banana-packing infrastructure. Most of the smallholders financed half of the improvements
and the Dutch Embassy in Colombia donated the other half.54
Additional expenses due to certification
In 2012, each smallholder household spent an average of USD 892 additionally to
comply with Fairtrade and GlobalGap certification, represented mostly in the greater cost
of weeding (manual weeding with machete versus herbicide application), an expense that is
directly proportional to the cultivation area. All cooperatives have decided to continue
avoiding the use of herbicides for weeding, although this is no longer a Fairtrade standard.
So strictly speaking, manual weeding cannot be considered as a Fairtrade compliance cost
anymore, although many smallholders still perceive it that way. Other additional expenses
were made for certification-related data recording, increased hygiene in the banana packing
area55
, and purchase of personal protection equipment (PPE).
Smallholders’ cash flow
All smallholders have banana-sales contracts with their cooperatives, to which they
sell 94% of their fruit, and cooperatives pay them punctually every week. 73% of members
think that the price for the banana box increased the last year, 25% think it has remained the
same, and 2% think that the price decreased.56
The price for bananas actually increased for
all cooperatives except for one, where banana prices have not gone up in the last two years
because they have a different buyer than the rest of the cooperatives. Furthermore,
smallholders said that the following cooperative services, which also enhance their liquidity
54
As part of the successful PPP Programme led by AUGURA and the Dutch Embassy in Colombia. 55
A GlobalGap requirement. 56
This response is partly explained by the USD devaluation versus the COP, which results in little or no real
price increase in Colombia.
An improved warehouse and WC at
a smallholder’s farm in Magdalena
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 45
are good; technical assistance (99%), input supply (96%), and financing (95%).57
93% of
the members have access to at least one of the following credit sources; cooperative
(72%)58
, formal banks (44%) and informal (12%).
Smallholders’ cash flow is also favored by cooperatives services, mostly funded with
the Fairtrade Premium. 83% of the smallholders indicated that their cooperative shares
with them costs and risks of banana production, because most organizations reduce their
infrastructure and production costs (fertilizer and fuel prices, irrigation and several
agricultural activities). Some cooperatives also lower the cost of fuel used for irrigation, of
manual labour for recaba59
and drainage. Cooperatives D and E support the establishment
and improvement of irrigation systems; the latter also purchased pallets. Cooperative F
finances hired-workers’ social benefits and Cooperative D covers the cost of soil analysis.
Nevertheless, Cooperative B has lowered its investment in the reduction of production costs
to smallholders in order to expand its social investment projects (see Table 9).
It can be concluded that Fairtrade has increased smallholder income and its stability,
has lowered production and agricultural-service costs, and has improved the access to
credit, thus reducing their cash flow or liquidity problems.
Maintenance of small-scale agriculture
99% of cooperative members declared that Fairtrade is a great contributor for making
family agriculture more attractive. Members asserted that the cooperative takes them into
account and collaborates with them in the following aspects: linking with markets (100%);
innovation and technology transfer (99%); transparency and justice (87%); access to assets
for production (87%); access to services (86%); and sharing risk and benefits (83%).
Cooperatives are providing other types of support to family agriculture, such as:
technical assistance, construction of a warehouse for agricultural inputs, improvement of a
banana processing plant, repair of access roads to farms and drainage, coordination of air
fumigation and banana transportation services, and loans for infrastructure and purchase of
farming equipment. Cooperative B is thinking of modernizing irrigation systems and
building a plant to produce drinking water for its members and for the community.
Cooperatives C and E have bought land to build their offices, which will allow them to
expand and improve services for their members. The latter cooperative also bought a
vehicle. Cooperative A subsidizes transportation for youngsters of members who study in
the National Learning Service (SENA), a public agency for technical training. Finally, one
of the exporters offers services to Cooperative A, such as the sale of agricultural inputs, air
fumigation, transportation of bananas to the port, and supports management of Fairtrade
and GlobalGap certification.
57
The last two services are mostly due to the existence of the Fairtrade Premium. 58
This service is provided with Fairtrade Premium funding. 59
Elimination of water deposits in banana plantations to avoid fungi and lower the relative humidity.
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 46
Regarding goals and dreams, members think that Fairtrade can contribute much, and
in many cases has already done so; for obtaining greater incomes (75%), for education of
children and grandchildren (51%), for making investments (23%), for buying land (21%),
for diversifying income (6%) and for Others60
(51%).
93% of members said that they enjoy more freedom at work, in production and
selling, and 98% of them think the same about their capacity to control their and their
family’s future. Due to better training and higher incomes, most of them said they now
have more influence in family and community decisions and can offer fairer treatment to
temporary workers in their farms. Non-Fairtrade smallholders think differently, because
they have greater uncertainty with respect to agricultural production, thus limiting their
capacity for planning their future.
Smallholders receive an average of 31 days of training every year, which has
generated changes in attitude. Training has been conducted in topics such as sustainable
banana production, environmental conservation, health and security, keeping agricultural-
production records, business administration, accounting, plus others. They have now more
awareness of the need to protect the environment, whereas non-Fairtrade smallholders
usually do not know how to protect natural resources in their farms. In focus group
sessions with Fairtrade-linked smallholders and hired workers, it was evident that they were
aware of the most important practices for environmental protection and Fairtrade-norm
compliance, and they mentioned that there was still a lot to be done in this sense.
5.2 Fairtrade impact on smallholder organizations
This section describes how Fairtrade has influenced the growth and development of
certified smallholder cooperatives. Because of its policy that calls for collective action by
potential beneficiaries, Fairtrade entry into the Magdalena Department contributed to the
reactivation of several cooperatives that had either been closed or been weakened by
60
‘Others’ includes reforestation, community projects, direct exporting of bananas by the cooperatives, etc.
Banana packing plant in a
smallholder farm in
Magdalena
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 47
internal corruption and/or the armed conflict. The latter had seriously restricted economic
activity in the region in general.
99% of cooperative members declared that they trust their organization and 87%
argue that Fairtrade promotes transparency in resource handling and decision-making. In
addition, because of training received, most smallholders declared that they could now
readily transmit their ideas and concerns to the organization. These perceptions are related
to the fact that the annual General Assembly of smallholders has the final decision on how
to invest the Fairtrade Premium and that members have similar access to the cooperative’s
service portfolio.
Thanks to Fairtrade and the existence of cooperatives, smallholders have assured
sales of 95% of their banana production, which has improved their incomes and has
allowed them to generate more and better jobs for hired workers in their own farms, thus
stimulating the local economy. The implementation of agricultural practices and
technology, which are more modern and sustainable, has been promoted, thus consolidating
a greater and better supply of bananas for export. It is estimated that, from 2010-2012,
average banana yields have increased by 13% in the Fairtrade cooperatives studied. It
should be noted that yield data in this impact study was collected from two sources;
cooperative managers (total annual banana production divided by the number of hectares in
production), and directly from smallholders themselves.61
Although the former source was
deemed more reliable, both sources indicate that yields are improving.
Among cooperatives, Fairtrade has promoted organizational structures that are more
business-oriented. This has been the case because many members have received business
training, there is a need to manage Premium funds adequately, and cooperatives now have
access to more funds (some derived from the Premium) that enable hiring of qualified
administrative staff. However, the study revealed several cooperative management
weaknesses, as follows; managers, leaders and smallholders do not have a solid knowledge
of their banana production costs; smallholders lack enough basic knowledge on the
Fairtrade System; managers, leaders and smallholders have an inadequate understanding of
the banana value chain, how the price of Fairtrade bananas is determined, and don’t seem to
be fully aware of the power exercised by supermarkets in this sense; in consequence, it
seems that cooperative communication mechanisms, information systems and data bases
relative to Fairtrade and to the banana value chain are rather weak; and despite the fact that
nearly 50% of cooperative members are 50 or more years old and exhibit low schooling
levels, there is little or no evidence that management has identified the need for
generational renewal.
Linkage to Fairtrade has enhanced the growth of four of the six cooperatives, where
Cooperative B stands out; in 2009, it had 37 members with 75 hectares; in 2011, 64
members with 161 hectares; and in 2013, 80 members with 214 hectares. In summary, in
four years it doubled membership and almost tripled area planted with bananas. In
Cooperative E, the banana area increased from 165 hectares in 2010 to 195 hectares in
61
During interviews, smallholders were asked several questions systematically so that the interviewers could
calculate their annual banana production. However, the accuracy of the information depended on the good
memory of the smallholders.
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 48
2012, an 18% increase, and the number of members increased by four in year 2012. In the
case of Cooperative C, the banana area went from 149 hectares in 2010 to 161 hectares in
2012, an 8.4% increase, and there was also a net increase of nine members. Cooperative F
increased its membership by nine in the last three years.
In summary, Fairtrade has strengthened smallholder cooperatives in several ways.
Since they liaison with Fairtrade and banana buyers who represent a stable market and
higher prices, smallholders now perceive cooperatives as being more important and value
their membership much more. The administrative structures of cooperatives are now more
solid because they are partly funded with the Premium. Using Premium funds, the
cooperatives now provide a broad portfolio of services, greatly appreciated by
smallholders, because they increase on-farm agricultural productivity, lower their banana
production costs, increase their income and purchasing power (loans) and improve their
education and training. Member participation is encouraged because they decide on how to
invest the Premium in the annual General Assembly.
Additionally, institutions such as AUGURA, ICA and FUNDAUNIBAN support
the social and technical operations of the cooperatives. It is important to note that the PPP
programme funded by AUGURA (banana private sector) and the Dutch Embassy has also
contributed greatly to the well-being of the banana smallholder segment of the population.
Commercial relationships
The study identified that cooperatives have a low bargaining power relative to
pricing with the two exporters. Some managers declared that buyers determine the banana
sales price, which is generally equal to the Fairtrade minimum price, but this should not be
the case. 74% of the smallholders surveyed perceive that, in 2012, the Fairtrade price for
bananas went up, 25% consider that it remained the same, and 2% think that it actually
decreased. In reality, for five of the six cooperatives, the price actually increased. As
already mentioned, one of the cooperative’s managers stated that its international buyer has
not increased prices for the last two years. Leaders from the other cooperatives said that
Fairtrade International has delayed the updating of the minimum price, and for this reason
one of the exporters decided to raise it unilaterally.
All of the Fairtrade cooperatives, as well as smallholders, have signed commercial
agreements with buyers. In contrast, not all of the non-Fairtrade smallholders interviewed
have contracts, and their main distribution channels are intermediaries (for the domestic
and export markets), and the supermarket chain Olímpica.
Cooperatives are all participating in the formation of a second-order organization
called ASOCOOMAG, with the objective of improving their negotiating power and the
sales price for Fairtrade bananas, by means of direct export to international markets. It
should be noted that the exporters ask for exclusivity62
, and, in addition, one of them is
accustomed to signing contracts involving long-term permanency clauses with smallholders
for the purchase and selling of conventional bananas. This limits the possibility of
62
This means that cooperatives cannot sell their bananas to other traders.
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 49
smallholders to export directly or to diversify their trade relationships and the creation of
ASOCOOMAG seeks to end this practice. All smallholder cooperatives consider that the
Fairtrade System should offer priority to Fairtrade-certified bananas from smallholders to
avoid having to sell on the conventional export market, at a lower price and without the
Fairtrade Premium benefit.
Impact on gender equity
Men generate almost all of the household income in 64% of the smallholder
households. However, in 36% of the households, women generate an average of 45% of
household incomes, in some cases reaching up to 100% when the household head is a
woman. It is reminded that 19% of cooperative members are female, and that many
households have diversified sources of income, where women bring non-agricultural
income derived from jobs, pensions, and small businesses. In contrast, in the case of non-
Fairtrade smallholders, participation of women in household income generation is nil.
Nevertheless, the number of women involved in on-farm productive activities is
low, due mainly to the degree of physical effort required for most of the work. When
women do participate, they do so mostly in temporary activities related to fruit packing and
not as permanent workers. 79% of the permanent workers with signed contracts are male.
With respect to remuneration, there is no evidence of discrimination against women in
terms of the value of wages paid.
Women’s participation in leadership and administrative positions is also low,
limited to the presence of female members in some of the Committees (for example,
Premium Execution, Solidarity, Housing, Health, Education, Social Welfare), or in
Supervisory Boards. Only in Cooperatives D and F is there a woman on the Board of
Directors, and in the former organization the Manager is also a woman. Cooperative B has
promoted women’s participation on its Board of Directors, but with little results. A
cooperative manager said that he thought there were self-esteem issues present.
In general, there are few specialized services for women, but several cooperatives
have trained them, using Premium funds, in topics such as food handling, family planning,
first aid, gender equity, domestic violence, etc. Some women also go to cultural events and
attend regular courses on banana production and certification, offered to all of the
members. Cooperative C has several projects targeted at women, such as literacy training,
formation of a gender team, training and production of banana flour. Most cooperatives
lack statistics on the number of women, both household heads and other family members,
who benefit from cooperative services and projects.
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 50
5.3 Fairtrade impact on local and regional development
Employment and labour conditions
As already mentioned, Fairtrade supported the reactivation of smallholder
cooperatives in the Magdalena banana zone, and has also contributed to their growth. This
has stimulated employment, since 96% of the smallholder members hire non-family
workers for on-farm labour, an average of 7 temporary workers per smallholder.
Depending on farm area, 28% of smallholders hire 1-3 workers, 40% hire 4-6 workers, and
13% hire 7-9, and 15% hire 10 or more workers. This labour is mainly for harvesting and
these worker teams harvest bananas from farm to farm. 35% of smallholders hire an
average of 1.6 permanent workers. It should be noted that non-Fairtrade smallholders only
generate an average of 4 jobs per farm. In addition, job opportunities for women are higher
in Fairtrade farms than in non-Fairtrade ones, mainly due to the establishment of washing
and packing stations. Since cooperatives continue to prefer manual weeding versus
herbicides, despite the fact that this is no longer a Fairtrade standard, the demand for local
unskilled labour has increased.
Fairtrade has also contributed to improving the labour conditions of hired workers
in smallholder farms, due to the requirements for obtaining and maintaining Fairtrade
certification. According to 93% of smallholders surveyed, Fairtrade benefits workers (both
hired workers and smallholders themselves) on the farms. On-farm labour conditions have
improved because of the payment of daily minimum wages63
in accordance with
Colombian law, the use of PPE, non-exposure to air fumigation, and access to sanitary
services in good condition. Smallholders now calculate hired-worker wages based on the
current minimum legal wage (CMLS) excluding social benefits, depending on the workday
duration and type of labour. Sometimes lunch is provided to the worker. Before Fairtrade
arrived, daily wages in the region were below the CMLS. Cooperative B leaders said that
the value of the daily wage is 10% above the CMLS, but daily wages actually show a lot of
variation; sometimes they are below, equal or above the CMLS (see footnote 61). 27% of
smallholders signed contracts with hired workers last year, and on average each cooperative
has 12 permanent workers with a contract.
Smallholders said that they do not use chemical inputs in their farms (herbicides or
pesticides). Only 6% of smallholder workers have suffered any kind of work-related
accident or disease, which resulted on average in 10.4 days of absence per worker. In focus
group sessions, workers hired by smallholders recognized their previous carelessness with
respect to health and job security in the workplace. They mentioned their initial reluctance
to using PPE because they were accustomed to working bare-foot and manipulating
63
The CMLS in Colombia is COP 589,500 plus COP 400,200 in social benefits, for a total of COP 989,700,
or USD 552,6 per month. In rural Colombia, temporary, and sometimes permanent workers, are not paid
social benefits and the government does little to control this situation. According to respondents, the average
daily wage in cooperatives for permanent and temporary hired workers is USD 12.28 and the maximum wage
is USD 13.96 to USD 16.75 and the minimum wage is USD 11.17. This wage variation is principally due to
the different types of work activities and to the several types of agreements between workers and smallholders
in relation to the supply of food at work.
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 51
agrochemicals unprotected. They now recognize the importance of using PPE and are
grateful for the training and supervision received.
Finally, hired workers and employees in cooperatives and smallholder farms do not
belong to a labour union that can support them in collective bargaining. In the case of
smallholder farms, the reason is that there are few contractual relationships especially for
temporary hired workers. It should be pointed out that in rural Colombia, farms of all sizes
are still highly informal and there is little or no labour union penetration. Likewise, non-
profit organizations such as cooperatives do not tend to have labour unions. A typical farm
owner in Colombia is very reluctant to hire a unionized worker.
Income diversification
Fairtrade promotes the diversification of agricultural and non-agricultural incomes,
as a strategy to stabilize smallholders’ household income. However, the study did not
detect much dynamism in this aspect. In 2012, 89% of the members did not invest in
activities for generating alternative income; the 11% that did, invested in new initiatives for
diversifying non-agricultural income. 6% diversified their income, mostly through retail
commerce and cattle-raising. Banana sales still represent an average of 98% of
agricultural-related household income, since only 8% of the members sell other crops or
cattle. The reason is that all of the smallholders think that they are receiving important
benefits from Fairtrade, which reinforces their trend towards specializing in banana
production. In other words, most smallholders do not believe that agricultural
diversification is a primary issue for them.
Impact on the local banana market
Most smallholders in the region are affiliated to Fairtrade and export their bananas,
so banana supply for the local and regional markets is relatively low, consisting mostly of
fruit that does not meet Fairtrade quality standards, equivalent to 4% of the total volume.
Therefore, it is perceived that there is no oversupply of bananas in the regional market,
which avoids price depression for the fruit.
Armed conflict, smallholders and Fairtrade
Public security and order in the banana zones of Magdalena have much improved.
The study revealed that smallholders and their families were direct and indirect victims of
the conflict and many have remained psychologically affected. They still remember the
presence of outlaw groups such as the leftist FARC-EP guerrillas and the rightist AUC
(Autodefensas Unidas de Colombia, a paramilitary group), which caused fear, uncertainty
and mass displacements. Many smallholders were victims of kidnappings, extortion,
murder and some had to observe homicides of family members or acquaintances, and found
corpses in the roads. In fear, many smallholders stopped going to their farms, neglected
them, which strongly weakened agricultural production and the economy in general.
Smallholders say that they recovered peace thanks to the “Democratic Security Policy” of
the previous government and to the disbandment of some armed outlaw groups.
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 52
Smallholders returned to their farms, banana production was stimulated thanks to Fairtrade,
and their economic situation improved markedly.
Cooperative leaders and on average 86% of smallholders, think that the intensity of
the armed conflict has gone down; 8% consider that it’s the same, and 6% believe that it
has worsened. The reason why 14% of the smallholders surveyed think that the armed
conflict is the same or has worsened is that the security situation has changed recently.
Cooperative managers and some smallholders have started to suffer threats and extortion,
due to the fact that the presence of outlaw groups has revived, such as the BACRIM64
.
Cooperatives, directors and smallholders have reported this to the police and security
measures have been taken; the police visit cooperatives weekly and are prepared to provide
security.
Last year, one of the cooperative managers received extortion threats. One
trimester, it could not operate calmly because the cooperative had refused to pay a
“vacuna”65
; smallholders, family members and the community in general leaves their
homes at night only until certain hours. Security measures have been taken, like cancelling
a meeting because of gun shots in the warehouse or decreasing the frequency of auditing
visits to the farms.
Smallholders consider that their linkage to Fairtrade helped them to overcome the
social and economic crisis left by the armed conflict, because it encouraged collective
action, agricultural production, labour formalization, reactivated technical assistance and
credit services, and lowered on-farm input and labour costs by using Fairtrade Premium
funds. They now believe that the future is better for banana-growing smallholders, and
banana production occupies the first place as a source of jobs in the region.66
In
consequence, all of the smallholders have the intention of continuing their affiliation to
Fairtrade. Smallholders and cooperative leaders think that Fairtrade has been an important
response to their problems, has created new spaces for their participation, and many even
believe that “without Fairtrade, we would not exist anymore”.
Migration levels
66% of the households do not have any relatives who have migrated in the last two
years, whereas 33% of households have had an average of 2.2 family members who have
migrated in this same period of time. However, migrants have not been youngsters
necessarily.67
It should be underlined that currently each member is generating an average
of seven temporary or permanent jobs in his/her farm. 30% of family members who
migrate to urban areas do so due to lack of opportunities in the rural area and 53% because
64
Emerging criminal bands. 65
“Vacuna” (extortive vaccine) is a payment that is demanded from potential victims by criminals to avoid
being kidnapped or killed. In Colombia, many business owners and ranchers pay large sums of money to
criminal bands to avoid attacks. 66
Municipal Plan for Management of Emergencies and Disasters 2012-2015. “General characterization of
risk scenarios”. Page 33. 67
Colombia is a developing nation where urbanization still continues and is a normal trend. It can be argued
that the migration rate could have been higher during the armed conflict due to insecurity and violence.
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 53
they have obtained better opportunities elsewhere. It should be noted that migration is also
partly related to the better education obtained by smallholders’ offspring through
cooperative support with Fairtrade Premium funding; some members send their teenagers
to universities in nearby cities and some youngsters obtain better jobs in urban areas
because they are better educated.
In summary, Fairtrade contributed much to the revitalization of the small-scale
farmer economy and smallholder cooperatives in the Magdalena banana zone. This impact
has been direct, through higher incomes from banana sales and investment of the Fairtrade
Premium, and indirectly by means of the multiplier effect of this incremental income,
which has stimulated the local commerce of goods and services and the demand for basic
services.
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 54
5.4 Conclusions and recommendations for cooperatives
5.4.1 Conclusions on Fairtrade impact
General
The study confirmed that Fairtrade has had a strong, positive impact on the small-
scale, banana-growers sector of Magdalena in the last three years. This impact has taken
place at the level of smallholder households and farms, smallholder cooperatives, and
neighboring communities. This favorable impact is the result of the implementation of
Fairtrade instruments such as the Premium, the minimum price throughout the year, the
requirement for democratic collective action by smallholders, and the several standards
related to on-farm labour conditions, environmental protection, and agricultural
infrastructure and traceability.
Premium investment has been an essential factor for achieving impact at the
household, farm, cooperative and community level. For example, on average, 35% of the
Fairtrade Premium is invested for enhancing on-farm productivity and lowering banana
production costs; 15% is spent to cover administration costs of the cooperatives; 12% is
used to pay for audits and Fairtrade-norm maintenance; 10% is expended for social welfare
within the community; 7% is invested in emergency funds for households and 5% is
invested in education of household members.
Smallholders
Fairtrade has contributed to increasing the standard of living of smallholders’
households for three main reasons. Firstly, sales of Fairtrade-certified bananas at the
minimum price have increased household income and stability, enabling basic housing
improvement, the purchase of key household assets, and improved access to non-subsidized
health services and to education for children and youngsters. Secondly, the investment of
the Fairtrade Premium in services for smallholders, including loans, has also facilitated
basic housing improvement, the purchase of key household assets, and better access to
medicine, education, training and emergency funds. Thirdly, more than one-third of the
Fairtrade Premium is being invested in enhancing on-farm productivity and lowering
banana production costs, which also has a significant, direct effect on household incomes.
The reasons mentioned above also favored food security among smallholders.
Although 77% of smallholders do not have food security problems, 23% did mention
having them. The latter smallholder segment has less per capita income because their
farms are smaller, they have more household members, and their income depends more on
banana sales. A significant proportion of these households are still living in poverty. In
addition, 77% of smallholder homes lack drinking water, which is common in the region
where rural communities obtain their water from wells, which are sometimes contaminated.
Besides, most smallholders expressed their dissatisfaction with the health services provided
by the health centers.
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 55
Fairtrade has also improved smallholder cash flow because it has increased incomes
and income stability, promoted a savings culture, lowered banana-production costs, and
improved access to credit and emergency funds. 93% of smallholders obtained loans,
mostly from their cooperative or a commercial bank.
Almost all smallholders (99%) believe that Fairtrade is a great contributor for making
family agriculture more attractive. They appreciate the support obtained through their
cooperatives relative to improved access to attractive markets, innovation and technology
transfer, transparency and justice, on-farm production assets, and services. They value the
fact that cooperatives are now sharing with them the risk and benefits of banana production.
Moreover, smallholders think that Fairtrade can contribute greatly to their goals and dreams
related mostly to higher incomes and education of their children. Finally, smallholders
received an average of 31 days of training every year that has generated positive changes in
attitude, such as improved environmental awareness.
Cooperatives
Fairtrade has contributed enormously to the strengthening of smallholder
cooperatives for several reasons. In the first place, total banana sales volumes of
cooperatives are increasing, as well as the amount and proportion of bananas sold on
Fairtrade terms (80%). Secondly, since cooperatives are the liaison with Fairtrade and
exporters that represent a stable market with higher prices, smallholders appreciate their
membership much more and are more motivated and committed. Member participation is
encouraged because they decide on how to invest the Premium in the annual General
Assembly. Moreover, four of the six cooperatives studied have increased their
membership in the last three years. Thirdly, the Premium has funded qualified
administrative personnel with a greater business orientation and improved skills for
resource management and record keeping. Also, cooperatives now have better-equipped
offices and some are in the process of building new ones. Fourthly, with Premium funding
cooperatives now provide a broad portfolio of services that are greatly valued by their
members because they improve on-farm assets and productivity, lower their banana
production costs, increase their income and purchasing power (loans) and improve their
education and training.
However, the study evidenced that cooperatives have several management
weaknesses, mostly related to their inadequate handling of Fairtrade- and banana value
chain-related information, information systems, and communications with members.
Managers, leaders and smallholders lack a solid understanding of their banana production
costs. Also, despite the fact that nearly 50% of cooperative members are 50 years old or
more and exhibit low schooling levels, there is little evidence that management has
identified the need for generational renewal.
Cooperative leaders and managers mentioned several Fairtrade-related concerns that
they believe should be addressed in the near future. Firstly, insufficient market demand in
European Fairtrade markets forces exporters to buy on average only 80% of their Fairtrade-
certified banana production, which obliges cooperatives to sell the remaining 20% to the
conventional market at lower prices. Secondly, the Fairtrade minimum price for bananas is
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 56
almost equal to its cost of production, which implies that the sustainability of smallholders
in the banana business really depends on the reduction of production costs by investing part
of Fairtrade Premium funds. Thirdly, the study revealed smallholders are assuming a trade
cost that should be covered by the one of the exporters, as the sale is on EXW terms. For
the above reasons, cooperatives are founding a second-level organization
(ASOCOOMAG), to improve their bargaining power in the Fairtrade banana value chain
and to increase the sales price of Fairtrade-certified bananas through direct export to
international markets.
Region
Fairtrade contributed much, directly and indirectly, to the revitalization of the
regional economy in the Magdalena banana zone. Direct impact has been achieved through
higher incomes from increasing sales of bananas on Fairtrade terms, local investment of the
Fairtrade Premium, and job creation. On average, each smallholder farm is generating
seven jobs, mostly temporary without formal contracts. Indirect impact has been reached
by means of the multiplier effect of this incremental income, which has stimulated local
demand for goods and services in general.
Smallholders consider that their linkage to Fairtrade helped them to overcome the
social and economic crisis left by the armed conflict, because it encouraged collective
action, market access and agricultural production, labour formalization, reactivated
technical assistance and credit services, and lowered on-farm input and labour costs by
using Fairtrade Premium funds. They now believe that the future is better for banana-
growing smallholders, and banana production occupies the first place as a source of jobs in
the region. In consequence, all of the smallholders have the intention of continuing their
affiliation to Fairtrade.
5.4.2 Recommendations
Fairtrade System
Fairtrade is very important for smallholder operations and income, but it cannot
absorb all of their Fairtrade-certified bananas. It is therefore recommended that the
Fairtrade system intensify its market penetration, market development and market
awareness strategies in European countries that buy Fairtrade-certified bananas that can
favor the market expansion for Fairtrade-certified bananas and also eventually lead to an
increase in sales prices.68
The study has shown a lack of understanding about the Fairtrade System, so it is
necessary that Fairtrade International explain in detail to cooperative leaders and managers
the context and process by which sales prices are defined in the Fairtrade banana chain, and
68
A main importer fears that Colombia might become less competitive, as new banana sources in Africa are
about to enter the banana market (including Fairtrade). These bananas can be offered much cheaper than
bananas from Colombia.
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 57
to emphasize the marketing strategies and great deal of pressure exerted by supermarkets
on their suppliers to keep prices low. It is suggested that Fairtrade International support all
cooperatives in determining their production costs accurately.
It is important that Fairtrade International lead the planning of a banana chain
meeting with the participation of cooperative leaders, exporters and Fairtrade, to improve
price and cost transparency, and to clarify responsibilities and commitments of the different
participants in the banana value chain.
It is recommended that Fairtrade International support smallholder cooperatives in
the establishment of a new trade contract policy that can favor their economic growth, and
also back their initiative to establish ASOCOOMAG as a direct exporter of Fairtrade-
certified bananas to international markets.
Cooperatives
Many farms are tiny and hardly economically viable. It is recommended that
cooperatives define and execute a strategy so that all members can maximize banana yields
in their farms. It is necessary that cooperatives develop integrated strategies targeted at the
15% of their members in poverty, focused on raising household incomes and food security,
taking into account their tiny farms.
As 50% of the members are older than 50 years, it is important that cooperatives
develop a strategy for generational renewal among their members, which could include
stimuli for participation of youngsters in farms and in the cooperative, or/and to facilitate
access to credit for land purchase and establishment of the banana crop.
It is recommended that cooperatives demonstrate undeniably, if that’s the case, that
the Fairtrade minimum price is not covering real production costs of bananas. It is
important that cooperatives, with Fairtrade International support, establish a new trade
contract policy that can favor their economic growth. It is suggested that cooperative
leaders and managers, advised by Fairtrade International, prepare a feasibility plan for
ASOCOOMAG as a direct exporter of Fairtrade-certified bananas to international markets.
Cooperatives depend much on the Fairtrade Premium, but their operations should be
viably run without this extra income. It is necessary that cooperatives design and
implement viable business models that can permit them to self-finance more of their
operations without having to depend so much on Fairtrade-Premium funding. It’s also
important that cooperatives improve their information systems and data bases and their use;
update Fairtrade-certified banana production costs using appropriate accounting methods;
and improve their internal communication with members on key basic aspects of Fairtrade
and the banana value chain in general.
Cooperatives tend to use the Fairtrade Premium more for internal use, while a lot of
members stress other needs as well. It is recommended that cooperatives look for
mechanisms to increase the impact in communities in their area of influence that could
include strategic alliances to secure counterpart funding for key community projects.
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 58
Regional projects, for example, could include the design and implementation of business
models for offering low-cost drinking water and toilets for rural communities and also for
supplementing or improving the health-care services offered by SISBEN and EPS to
cooperative members and their relatives.
Exporters
As cooperatives expressed some confusion as to whom should bear certain trading
costs, it is recommended that exporters participate in work meetings with Fairtrade
International members, cooperative mangers and leaders to discuss and improve price and
cost transparency, and to clarify responsibilities and commitments of the different
participants along the banana value chain.
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 59
6. Characterization of Plantations and Hired Workers
This section first presents the three commercial plantations studied in Urabá that
have been linked to Fairtrade for several years now, and also the plantation used as the
control group, which joined Fairtrade just recently. Then, the main socioeconomic aspects
of plantations and their hired workers are summarized. Due to its great importance as the
key instrument for Fairtrade impact at the level of hired workers, households,
organizations, community and region, the Fairtrade Premium concept is explained, along
with a description of the related budget distribution in the plantations.
6.1 Plantations: location and history
The Fairtrade banana plantations evaluated in this impact study were: Bananeras de
Urabá S.A. and the Los Cedros and Marta María farms, located in the Municipalities of
Turbo and Apartadó, in the Urabá region, Department of Antioquia in northern Colombia.
Additionally, a control plantation was studied as the counterfactual. See Figure 7.
Figure 7. Geographic location of the Fairtrade banana plantations studied in Urabá
These plantations are dedicated to production, processing and packing of bananas
for international and domestic markets. All of their hired workers live outside the
plantations, on average 14 km away, and all belong to a Workers’ Corporation,
administered by a Joint Body, in charge of the Fairtrade Premium management.
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 60
Plantation A was founded in May 1963, composed of six farms affiliated to
Fairtrade with a total area of 660 hectares under banana cultivation. It hires 458 workers in
the farms, with permanent contracts (45 with one-year contracts and 413 with indefinite
contracts), of which 427 are men and 31 women. The plantation exports all of its
production through an exporter, of which it is also a shareholder. It has had GlobalGap and
Fairtrade since February 2004 and November 2005, respectively. All of its workers belong
to a Corporation that owns and manages the Fairtrade Premium. This Corporation started
operations in March 2008, and although the Fairtrade certification dates back to 2005, a
Foundation used to manage these resources. Most of the services offered to workers with
Fairtrade Premium funding are delivered as loans and with low interest rates, so therefore
the Corporation is actually accumulating the Premium funds. The Corporation’s Joint
Body is composed of 11 worker representatives, 2 management representatives with their
substitutes, and one representative of the employees. Worker representatives in the Joint
Body come from six different banana farms, and each one has his/her substitute.
Management representatives have voting power, although they are a minority, and their
position has no time limit.
Plantation B is part of a larger company owned since June 2007 by an exporter, a
vertically-integrated company. Some of its farms are linked to Fairtrade but others are not,
and each of the Fairtrade-linked farms has its own Corporation. The plantation exports all
of its production through the exporter. It has an area of 216.78 hectares under banana
cultivation and hires 156 workers with permanent contracts, of which 146 are men and 10
women. It has had GlobalGap and Fairtrade certification since 2003 and 2007,
respectively. The plantation workers belong to a Corporation, founded in 2007, which
manages the Fairtrade Premium funds. The Joint Body is made up of 6 worker
representatives and 2 management representatives. Like the previous plantation, most of
the services offered to workers by Plantation B with Fairtrade Premium funding are
delivered as loans and with low interest rates, so therefore the Corporation is accumulating
the Premium funds.
Plantation C belongs to a larger organization founded in July 1987. The farm has an
area of 31.66 hectares under banana cultivation and hires 22 workers, all with permanent
contracts, of which 20 are men and 2 women. The plantation sells all of its production to
one of the main exporters. It has GlobalGap and Fairtrade certification, the latter since
January 2005. Workers belong to a Corporation founded in 2007. Although Premium
funds were received since 2005, they were initially distributed directly among the workers.
Nowadays, Premium funds are managed by the Corporation’s Joint Body. The Joint Body
is made up of 4 worker representatives and one management representative. Like the
previous plantations, most of the services offered to workers with Fairtrade Premium
funding are delivered as loans at low interest rates, so the Corporation is also accumulating
the Premium funds.
The Control plantation belongs to a bigger company and has an area of 71.5
hectares, of which 58.33 are planted with bananas. It has 43 workers on the farms with
permanent contracts, of which 34 are men and 9 women. The plantation exports its banana
production through the same exporter as most of the other certified plantations. It has
GlobalGap certification and recently obtained Fairtrade certification.
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 61
6.2 Basic characterization of plantations
This section describes social and economic aspects of the four plantations studied
and points out the major differences among them.
Socioeconomic information
Table 12 presents basic socioeconomic information of the hired plantation workers.
Table 12. Basic socioeconomic aspects of hired workers in the four plantations
studied, annual 2012 information (USD)
Information Plantation
A
Plantation
B
Plantation
C
Total or
Average
Control
Plan-
tation
Area of plantation (hectares) 660 216.78 31.66 908.44 71.5
Boxes sold 1,463,765 375,623 68,292 1,907,680 167,926
% sold on Fairtrade terms 78.9% 74.6% 86.7% 78.3% N.A.
Average yield (tons/hectare) 40.7 31.4 39 38 42.6
# of workers 458 156 22 636 43
# of male workers 427 146 20 593 34
# of female workers 31 10 2 43 9
Average worker age 37 39 40 38 50
Average worker schooling
(years) 9 10 8 9 7
Average # of household
members 4 5 4 4 5
% of workers with food
security 100% 100% 100% 100% 100%
Average household income 10,618 11,344 9,740 10,766 10,767
Maximum household income 18,958 15,702 12,010 17,919 14,763
Minimum household income 6,971 8,840 8,463 7,481 7,935
Average per capita income 2,822 2,453 2,464 2,720 2,748
Maximum per capita income 7,404 3,925 3,192 6,405 4,921
Minimum per capita income 1,267 1,473 1,693 1,333 882
Average income from job in
plantation 8,363 9,652 8,199 8,674 8,355
Maximum income from job
in plantation 11,351 10,610 8,463 11,069 9,231
Minimum income from job
in plantation 6,879 8,840 7,899 7,395 7,750
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 62
The following socioeconomic aspects shown in Table 12 can be highlighted; the
land area of Plantation A is more than 20 times the land area of Plantation C; the average
yield in the Control plantation is 12% higher than the average yield for Fairtrade
plantations; most of the plantation workers are male; the Control plantation has a higher
percentage of female workers; the average age of workers in the three Fairtrade plantations
surveyed is 38 years versus 50 years for the Control plantation; food security levels of
workers in all four plantations is 100%; and finally, there is a large difference between the
minimum and maximum 2012 household incomes (USD 6,971 to USD 18,958) and for per
capita incomes (USD 1,267 to USD 7,404). These latter household income variations are
due to differences in the number of household members that are employed and in the
number of household members. In addition, Table 13 shows that the penetration of basic
services in homes of plantation workers is high, and the difference between Fairtrade and
non-Fairtrade plantations is small.
Table 13. Penetration of basic services in households of hired workers of the Urabá
plantations studied
Services Plantation
A
Plantation
B
Plantation
C
Weighted
average
Control
Plantation
% with electricity 100% 100% 100% 100% 100%
% with gas 100% 100% 100% 100% 100%
% with drinking water 97.1% 100% 100% 97.9% 83%
% with piped water 85.3% 100% 50% 87.6% 83%
% with WC 97.1% 100% 100% 97.9% 100%
% with sewage 100% 100% 25% 97.4% 100%
% with garbage disposal 100% 100% 100% 100% 100%
% with insect control 100% 100% 100% 100% 100%
6.3 Banana sales volumes, sales prices and production costs
Banana sales volume
Table 20 in Section 7.1 shows the total number of boxes sold from 2010–2012 by
the three plantations studied, and the proportion sold on Fairtrade terms. The average
Fairtrade banana sales volume, in boxes, for the three plantations studied, during the last
three years has been as follows: 975,403 boxes in year 2010; 933,259 boxes in 2011, and
902,101 boxes in 2012.
Figure 8 shows information on plantations’ banana yields from 2010–2012. As
mentioned, yields are decreasing due to climatic conditions and weed-control limitations.
Average banana yields for all three plantations were 43 tons/ha in 2010, 40 tons/ha in 2011,
and 39 tons/ha in 2012. This decrease in banana yields was caused primarily by climatic
conditions (periods of drought and excessive rainfall), and in the case of the largest
plantation, due to problems with manual weed control.
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 63
Figure 8. Average annual banana yields (tons/ha) of plantations in
Urabá
Tables 14 and 15 detail total banana sales made by the plantations to the Fairtrade
and conventional export markets.69
Table 14. Total Fairtrade banana sales, 2010–2012 (USD thousand)
Plantation 2010 2011 2012
Plantation A 8,654,844 8,434,688 8,829,336
Plantation C 382,313 451,491 445,622
Plantation B revealed a Fairtrade sales volume of 115,630 17 kg-boxes and 23,759
20-kg boxes in year 2012 and 303,723 17-kg boxes in 2011.
Table 15. Total banana sales to the conventional export market, 2010–
2012 (USD thousand)
Plantation 2010 2011 2012
Plantation A 1,203,812 1,333,875 2,395,427
Plantation C 58,232 92,683 152,817
Plantation B sold in the conventional export market 57,969 18.14 kg-boxes in 2012
and 147,578 in 2011.
69
Plantation B did not provide sales information in USD.
YEAR PLANTATION A PLANTATION B PLANTATION C
2010 46.5 33.6 45
2011 40.9 33.7 45
2012 40.7 32 39
0
10
20
30
40
50
Ton
s
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 64
Sales price of bananas
Plantations A and C sell their bananas to the same exporter and Plantation B sells to
another one, a vertically-integrated company that owns Plantation B. The exporters buy the
fruit as EXW and sign one-year export contracts. One of the exporters pays USD 6.70 for a
18.14-kg Fairtrade banana box, USD 6.28 for a 17-kg box, and USD 7.40 for an 18.14-kg
box for the conventional export market. These prices are set in accordance to a production-
cost analysis conducted by the plantation. Table 16 shows current sales prices and weights
for banana boxes for each plantation.
Table 16. Current sales price (USD) and weight of bananas boxes in the
Fairtrade and conventional export markets70
Plantation FT Conventional
(First quarter)
Plantation A 7.73 (18.14 kg) 6.46 (18.14 kg)
Plantation B71
6.70 (18.14 kg)
7.40 (18.14 kg)
Plantation C 7.83 (18.14 kg) 7.50 (18.14 kg)
Production costs
All of the plantation managers indicated that the current profitability level is
minimal, since the unit production cost is similar to the unit sales price. Table 17 shows
the production cost for Plantations A and C; Plantation B did not supply this information.
In contrast, the cost of production of a box of bananas for the Control plantation is USD
6.44 and the sales price is USD 7.23; this price is lower than the one paid for Fairtrade
bananas, and does not receive the Premium.
Table 17. Current cost of production (USD) of an 18.14-kg box of bananas in
the Fairtrade and conventional export markets72
Plantation FT Conventional
Plantation A 7.64 6.60
Plantation C 7.58 7.58
Plantations A and C both cover the cost of the following activities: washing,
disinfection, packing and transportation to the port. Plantation C assumes the same costs,
but transport to the port is covered by one of the exporters. One of the exporters sells the
fruit in the UK and Germany. This same exporter also offers financing services for the
production and marketing functions.
70
This data was officially provided by plantation managers. 71
The buyer also owns Plantation B (is vertically integrated). A manager said that the owner determines the
sales price of the Fairtrade and conventional boxes subjectively. 72
This data was officially supplied by plantation managers, and suggests that plantations have different
methods for calculating production costs, maybe some incorrectly.
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 65
6.4 The Fairtrade Premium concept and investment
The Fairtrade Premium is an additional payment that plantations receive for bananas
sold on Fairtrade terms amounting to USD 1.00 per box73
that has to be invested in the
economic, social or environmental development of the workers, organization and
community. All plantations, in accordance with Fairtrade standards, have constituted a
non-profit legal organization, a Corporation, which represents the workers and is
administered by a Joint Body whose members are mainly workers and some management
representatives who together decide on how to invest the Premium. Its objective is to
promote, execute and develop social policies, strategies, projects, plans and programmes
with Premium funds, for workers, family members and for the communities around the
Fairtrade-certified farms.
Corporations have the following administrative and controlling organs: General
Assembly, Joint Body, Fiscal Controller and Supervisory Committee. Joint Bodies decide
on Fairtrade Premium investment without any external imposition, but it is mandatory that
project selection and fund management be conducted by means of transparent, participatory
and democratic processes. Projects can promote workers and community well-being, and
an annual plan is prepared that has to be approved in the General Assembly of the workers.
In 2011, the Joint Bodies of all of the Fairtrade plantations in Urabá invested the
Fairtrade Premium (USD 6.15 million) in the following areas: USD 3.8 million in housing
construction and improvement (62%), USD 550,000 in education and training programmes
(9%), and USD 1.8 million in recreational and cultural programmes, medical assistance,
community assistance and response to natural disasters (29%).
Figure 9 shows the Premium value received by the three plantations during the last
three years; the great difference between the first plantation and the rest is due to its size
and total annual sales reported. In 2012, the three Fairtrade plantations studied received the
following amounts of Fairtrade Premium: Plantation A (USD 1,317,908); Plantation B
(USD 252,091) and Plantation C (USD 61,350). The Fairtrade Premium is a key
instrument that has funded the improved standard of living of workers and their family
members in the last three years.
73
Table of minimum prices and Fairtrade Premium. Version 2013.
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 66
Figure 9. Amount of Fairtrade Premium received by the three plantations
studied, in the last three years (USD)
Table 18 shows the type of projects conducted with the Fairtrade Premium in each
of the plantations studied. It highlights that most projects focus on the welfare of workers’
households and the community, but the main investment of Premium funds has been for
housing purchase and improvement for workers. Plantation managers did not provide
information on how Premium funds were distributed among the various projects. The
study suggests that most investment in workers’ and community well-being is funded by
the Premium and in lesser proportion by the plantation or private sector foundations. It
should be noted that plantation managers did not answer the question regarding the amount
of the company’s own resources being spent for workers’ and community well-being.
YEAR PLANTATION A PLANTATION B PLANTATION C
2010 1,189,518 231,869 56,114
2011 1,186,992 288,347 67,209
2012 1,317,903 252,091 61,350
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 67
Table 18. Type of projects conducted with the Fairtrade Premium by the Urabá
plantations
Plantation Projects
Plantation A
Housing programmes (Construction of the Rosalba Zapata housing unit)
Construction of houses on own land
Somos Familia Project (Improvement of quality of life, one-year coaching)
Scholarships for learning English
PIVD (Project for induction to university life)
Credit (emergencies and household appliances)
Training
Ads promoting environmental protection
Web page design for company
Sponsorship of agricultural projects for workers
Design of an educational and cultural park at the Barrio Obrero (Apartadó)
Donation of musical instruments to the Cultural Center (Casa de la Cultura) in the town of
Apartadó, to ethnic groups in Apartadó and Chigorodó.
Construction of a bridge in the Vereda Honduras.
Plantation B
Education
Housing
Health
Support to family group
Plantation C
Housing (purchase and improvement)
Education (Per diems for members who study, computer training for children, training on
the Fairtrade norm, educational aids and school kits, scholarships for higher education)
Health
Emergencies
Environment
Community support
Loans for household appliances
Health co-payment for elders
Support to the FUNTRAJUSTO initiative (sponsoring other non-Fairtrade farms)
Sponsorship of entrepreneurial projects presented by hired workers
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 68
7. Impact of Fairtrade on Plantations
7.1 Socioeconomic impact of Fairtrade on hired workers’ households
Standard of living of hired workers
All hired workers indicated that their quality of life is better after their plantations
joined Fairtrade, and 92% think the same about their economic situation. Workers perceive
that the main Fairtrade benefits are: more access to credit (88%), home purchase and
improvement (75%), increased access to education (71%), and more training (41%). Of
these benefits, the most appreciated by workers were improved access to housing and to
credit.
The average household income in 2012 for hired workers in the three Fairtrade
plantations was USD 10,766, ranging from USD 6,971 to USD 18,958. The average
household income for workers in the Control plantation in 2012 was the same (USD
10,767), ranging from USD 7,935 to USD 14,763. The average annual per capita income in
2012 for workers in the three Fairtrade plantations was USD 2,720 (ranging from USD
1,267 to USD 7,404), and USD 2,748 in the Control plantation. The average annual
income obtained from jobs in the three Fairtrade plantations was USD 8,674 and USD
8,355 from jobs at the Control plantation. This income represents 81% of total household
income, with a variation from 38% to 100%. 74% of workers believe that this income
covers their basic needs (see Table 12).
91% of the workers affirmed that after joining Fairtrade, their household assets on
average increased by 64%.74
In the last three years, 53% of the workers improved their
housing, mostly the kitchen (42%), walls (29%), WC (21%), roofing (21%), floors (21%),
and 21% bought household assets. 52% and 48% of the houses have tile and cement floors,
respectively. The average investment in housing in 2012 was USD 2,900. These positive
trends are due to greater incomes and improved access to loans, the latter funded with the
Fairtrade Premium.
All workers said that they did not have food security problems in their households,
and 100% wear clothing in good conditions. 50% of the households have children aged 6-
12 and all of them go to school. 65% of the households have other members aged 13-40
who are studying. 68% of the households have obtained at least one scholarship for
education. 76% of the workers own a house. All of the households have electricity, use
gas for cooking, dispose of garbage, and control insects. 98% of the households have
drinking water and a WC, 97% have sewage, and 88% have access to piped water (see
Table 13).
Table 19 describes the ownership level of household assets among plantation
workers. For comparison, related information for all Colombian households is included.
When joining Fairtrade, all plantations created a special programme that offered credit for
74
Workers were asked to calculate the percentage of household assets that were purchased after their
plantation joined Fairtrade.
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 69
household appliances so that workers and their families could improve their standard of
living. Ownership levels for these types of goods are higher among Fairtrade plantation
workers than the Colombian national average. However, the Control plantation exhibits
somewhat higher ownership levels than the average for Fairtrade plantations due to its
effective policy that stimulates savings among its workers. It should be noted that in focus
group sessions, family members emphasized the benefit of having a computer with access
to the Internet.
In 2012, 59% of the workers saved an average of USD 429, ranging from USD 84 to
USD 1,115. These savings represented an average of 4.6% of total income. 78% of savers
incremented their savings level after joining Fairtrade by an average of 91%. It should be
noted that the control plantation has developed a sound savings policy among its workers,
since 83% of them saved an average of USD 1,171 in 2012.
Table 19. Asset ownership for hired workers studied in the Urabá plantations (%)
96% of the workers had access to a loan from at least one of the following sources:
the plantation (66%), the Corporation (30%), informal (28%) and formal banks (22%). It
should be underlined that 83% of the workers at the control plantation accessed credit
through informal sources because the company does not offer this service. 15% of
Fairtrade workers invested an average of USD 2,872 in 2012 for income generation.
In relation to goals and dreams, Fairtrade plantation workers think that Fairtrade can
contribute, and has already done so, to: family education (79%), owning or improving
housing (67%), own education (50%), stable incomes (19%) and income diversification
(9%). 89% of workers believe that since joining Fairtrade, they have more influence on
75
Source: DANE ECV 2011 – ECV 2012. Data expanded with population projections, based on results of the
2005 Census. 76
DANE news bulletin: “Basic Indicators of Information and Communication Technologies TIC/Use and
penetration of TIC in Households and persons 5 years old or more” Bogotá, D. C., 25 March 2009.
Assets Plantation
A
Plantation
B
Plantation
C Average
Country
average 75
Control
Plan-
tation
% with cellphone76
100% 100% 100% 100% 83.8 100%
% with refrigerator 97.1% 100% 100% 97.9% 78.7 100%
% with TV 97.1% 100% 100% 97.9% 91 100%
% with fan 97.1% 100% 100% 97.9% - 100%
% with computer 82.4% 100% 100% 87.3% 38.5 100%
% with bicycle 73.5% 100% 75% 80% - 100%
% with radio or sound
equipment 61.8% 25% 25% 51.5% 47.9 50%
% with motorcycle 23.5% 0% 75% 19.2% 20.6 50%
% with washing machine 20.6% 50% 100% 30.5% 51.8 67%
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 70
household decision-making and 73% believe the same with respect to community decision-
making.
Table 20 shows the proportion of banana boxes sold on Fairtrade terms in the
certified plantations studied in the last three years. Although the total number of boxes sold
decreased in this period, the percentage sold on Fairtrade terms actually increased. On
average, the three plantations studied sold 78.3% of their bananas on Fairtrade terms.
Table 20. Proportion of banana boxes sold on Fairtrade terms in
the plantations studied (2010-2012)
Plantation 2010 2011 2012
Plantation A (18.14-kg boxes)
Total boxes sold 1,670,193 1,468,644 1,463,165
FT boxes sold 1,260,114 1,189,427 1,154,440
% 75.4% 81.0% 78,9%
Plantation B (17, 18.14 and 20-kg boxes)
Total boxes sold 401,834 451,301 375,623
FT boxes sold 269,345 303,723 280,129
% 67.0% 67.3% 74.6%
Plantation C (18.14-kg boxes)
Total boxes sold 78,669 78,622 68,292
FT boxes sold 54,838 64,279 59,215
% 69.7% 81.8% 86.7%
Work and health conditions of hired workers
Table 21 presents a summary of the monthly salary (including legal social benefits)
for male and female workers in Fairtrade-linked plantations from 2010–2013, including
fixed-term and permanent contracts. It should be noted that wage levels reached a peak in
2011 but were lowered in 2012 and remained the same for 2013. This suggests that private
sector–labour union relations are mature because both parties are making objective
decisions. For example, it seems that wage levels for hired workers are being correlated to
international banana prices. Male workers receive on average a salary that is 12.8% higher
than the salaries for women. However, the difference in male and female salaries is lower
in Fairtrade-linked plantations than the average for the banana industry.
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 71
Table 21. Monthly salary of plantation workers in two Fairtrade
plantations, 2010-2013 (USD)
Plantation Gender Type of
contract 2010 2011 2012 2013
Plantation
A
Women Fixed term 497 538 502 506
Indefinite term 668 726 655 649
Men Fixed term 561 607 567 571
Indefinite term 680 737 715 720
Plantation
C
Men and
Women Indefinite term 552 598 614 618
Salaries include a basic wage plus legal social benefits and other extra benefits. 39%
of the workers think that the value of their wages is on average 56% above the average
wage in the region, and 54% think it’s the same. This is confirmed by Table 21 that shows
that indefinite-term workers are receiving a salary above the CMLS and fixed-term workers
receive one that is similar to the CMLS.77
89% of workers agree on how their wages are
calculated.
The composition of this salary is the basic salary plus 52.374% for legal social
benefits. In addition, extralegal aids and premiums can range from 3–6%. The legal social
benefits are distributed as follows:
Severance pay: 8.33% (Company)
Severance pay interest: 1% (Company)
Service-related bonus: 8.33% (Company)
Holidays: 4.17% (Company)
Non-financial contributions: 9% (Company)
SGSSS (General System of Social Security in Health) contributions: 21.544%
(Company) plus 8% (Worker) In the case of the control plantation, male workers receive a monthly salary of USD
462 plus 54% in the legal social benefits for a total of USD 711, while female workers
receive USD 693, or 9.7% less. This salary is similar to the one paid by Plantation A and
15% higher than the monthly salary paid by Plantation C. Temporary workers obtain extra
social benefits like support for housing, schooling, eyeglasses, maternity and transportation.
The daily wage is slightly different for men and women; COP 4,812 (USD 2.69) per hour
for men and COP 4,688 (USD 2.62) per hour for women. The reason for this difference is
that male tasks demand more physical effort and are riskier.
Plantation workers believe that the greatest Fairtrade contributions to labour
conditions are: workers are treated well in the workplace (53%), better sanitary services
77
The CMLS in Colombia is COP 589,500 plus COP 400,200 in social benefits, for a total of COP 989,700,
or USD 552.6 per month.
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 72
(44%), and labour stability (17%). In focus group sessions, workers repeatedly confirmed
that labour conditions in Fairtrade plantations are better than in other plantations.
All workers surveyed responded that their labour stability is good. Most of them
have signed an indefinite-term contract, with social security and 15–17 days of vacation,
although a minority of workers has one-year contracts. 91% of the workers said that they
are permanent workers. On average, they worked 9.3 hours daily and 4.93 days weekly. In
contrast, only 16% of the Control workers have indefinite-term contracts and the remaining
84% have one-year contracts. All of the workers think that after joining Fairtrade, they
now have greater capacity for controlling their and their family’s future, which is not the
case for workers at the Control plantation, who think that they lack sufficient labour
stability for that. 93% of Fairtrade plantation workers and 83% of the Control workers
want to continue working in their plantation.
All workers, including those in the control plantation, affirmed having access to a
WC and drinking water in the workplace. The totality also affirmed that they have access
to health services through EPS and that they have occupational health services at work. All
of the workers use PPE in the workplace. 98% of the Fairtrade plantation workers and 83%
of the workers in the Control plantation did not have to deprive themselves of medical care.
18% of workers were absent from work due to accidents, averaging absences of 41
days. 26% of workers were absent from work due to sickness, averaging 5.7 days of
absence. 42% of workers lost an average of USD 123 due to absences from work caused
by accidents or sickness. Despite these figures, managers said that Fairtrade has improved
labour conditions thanks to the increased use of PPE and lesser use of agrochemicals
because accidents and sickness levels in Fairtrade plantations decreased, and there was an
important reduction in work absences. This was not the case for the Control plantation
workers, because due to sickness, 37% of them had to leave work for an average of 37
days. 67% of the Control plantation workers lost an average of USD 201 in income due to
work absences caused by accidents or sickness.
Workers are aware of the following workers’ labour rights: salary according to
collective bargaining (87%), non-discrimination (68%), non-harassment (61%), freedom of
association (58%), access to PPE (51%), medical care in the workplace (49%), appropriate
sanitary services in the workplace (17%) and sickness leaves (11%). No worker mentioned
having suffered violation of any of their rights. On the other hand, the Control plantation
workers are not unionized and said they were not interested in doing so. They argue that
the owner is already offering them good legal and extra-legal social benefits. However, the
study found out that the control plantation workers are hardly aware of their labour rights in
contrast to Fairtrade-linked workers.
With respect to gender, the proportion of female workers in plantations is low (7.7%),
which is reasonable due to the type of work in the banana plantations. At the Control
plantation, 21% of the workers are female. Although the companies reported that the daily
wage (USD 1.39 or COP 2,500 per hour) is the same for men and women, in reality,
salaries are paid as a function of the type of activity conducted. Activities requiring greater
physical effort, such as agricultural labour, are paid better and cannot be executed,
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 73
generally, by women. Thus, Plantation A pointed out that monthly income for men,
including social benefits, is on average 12.8% higher than for women. However, Plantation
C pays identical salaries to men and women (see Table 21).
According to the Joint Bodies of the three Fairtrade plantations, women in
households who benefit from Fairtrade include female workers, and female relatives such
as wives, daughters, mothers and sisters.
Plantations have a maternity policy in accordance to Colombian law and offer
services to women such as recreation and training in subjects like savings, agricultural
activities, family relationships, food handling, etc. The Programme “Somos Familia”78
in
Plantation A targets women and its objective is to provide households with coaching during
one year at least, to improve their standard of living. However, the study did not find
evidence of strategies to encourage gender equity inside the plantations. As mentioned, the
proportion of female workers in plantations is low (7.5%), which is reasonable because of
the type of work in banana plantations. Therefore, the number of women in leadership
positions in Joint Bodies and Worker Committees is also low, but it was pointed out that
sometimes women do not show much interest in filling these positions.
78
“We Are a Family” in English.
Workers’ restaurant at the
Los Cedros farm
Cableway carries bananas to
the packing plant
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 74
87% of workers’ households have children and youngsters aged 0–17; this segment is
supported with training, recreation, English scholarships, educational aids and Christmas
gifts.
Income diversification
Fairtrade facilitates income diversification by workers, and programmes are
emerging that encourage and accompany the creation of microenterprises among workers’
relatives, but the study did not detect a great dynamism in this sense. Workers are now
more concentrated on their own and their children’s education, and on improving their
housing. Plantations have also prioritized the purchase of housing by their workers. 15%
of the workers invested in income generation, with an average of USD 2,872. 35% of the
households have diversified income and savings. The main sources of income are:
plantation jobs (100%), other jobs (26%), rent (18%), and own business (13%).
Migration levels
Urabá is a multicultural region with 600,000 inhabitants, mostly immigrants from
neighboring areas who arrive in search of new opportunities. This is reflected in the
composition of plantation workers. The study indicated that Fairtrade has contributed to
job generation due to the stimulation of banana production and, in general, of the local
economy, caused by the multiplier effect related to increased incomes derived from the
Fairtrade Premium and increased banana exports. Furthermore, Fairtrade also facilitates
increased training and education for youngsters, which can expand their working
opportunities, especially in urban areas. The study indicates that in the last two years, 26%
of the households have had relatives who have migrated from the rural areas, 47% due to
lack of opportunities and 35% because of better opportunities elsewhere.79
7.2 Fairtrade impact on plantation profitability and investment
In general, Fairtrade affiliation and the GlobalGap certification open preferential
markets to plantations because of the resulting good quality of the fruit. However,
according to Plantation A, Fairtrade affiliation resulted in a slight profitability reduction for
the plantation. The manager also said that the company has been losing money in the last
three years due to reduction in banana yields, higher cost of weeding, and the dollar
devaluation.80
In contrast, Plantations B and C said that their profitability in fact increased
after joining Fairtrade, although the latter plantation explained that the increase was low but
that, anyway, joining Fairtrade was justified because of the social benefits derived from the
Fairtrade Premium. Profitability increases related to Fairtrade are due to the larger banana
sales volume and to a slight yield increase. It should be highlighted that the managers of
Plantation A (a large plantation) and Plantation C (a small plantation) coincide in asserting
79
Colombia is a developing country where urbanization processes are considered to be normal. Migration
rates were probably much higher in times of the armed conflict. 80
The price of bananas in the international market is defined in US dollars. When the US dollar devaluates in
relation to the Colombian peso, domestic banana producers receive less pesos when they sell their fruit.
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 75
that lowering agrochemical application for pest and disease control is more feasible in the
smaller plantations.
Nevertheless, Fairtrade affiliation has also resulted in a notable reduction of direct
investment in workers by the plantations, because services demanded by workers are now
channeled through the Joint Body and financed with Fairtrade Premium funds. For
example, before Fairtrade, when a worker had a health emergency in his household that
he/she could not solve, the employer usually felt the obligation to collaborate. Also,
sometimes workers requested loans from their employers for the purchase of household
appliances but the employer was only able to provide credit to a minority of the workers.
After joining Fairtrade, these worker-related costs in support of workers are not assumed
now by the plantations because they are covered using Premium funds.
In 2012, due to Fairtrade Premiums, Plantation A received USD 1.318 million,
Plantation B USD 252,000, and Plantation C USD 61,400, sums that are managed by their
respective Joint Bodies (see Figure 9). Plantation A invests the Premium in the following
services for its workers: credit by means of a revolving fund for housing, education,
household appliances, and others; training, strengthening of collective action and social
support through the Programme “Somos Familia”. At Plantation B, these funds are spent
primarily in housing construction, purchase and improvement, scholarships, health aid for
children and adults, training, sports, and loans for household goods. In Plantation C, the
Premium is invested in education (scholarships, aids, school kits), computer courses for
children and youngsters, housing, health co-payment for elders, training, and others (see
Table 18).
In relation to community support, Plantation A invested in infrastructure (a bridge,
parks, sports courts, and sidewalks) and donated funds to municipalities, indigenous groups
(musical instruments) and elders, and for allocations to schools and hospitals. Additionally,
together with the municipality, it is building a thematic library. Plantation B offers
scholarships and medicine, and invests in a nursing home for elders as part of a project led
by the Foundation of Fairtrade Workers (FUNTRAJUSTO). FUNTRAJUSTO was
founded by the majority of Joint Bodies in Urabá with the objective of planning and
executing community projects in collaboration with local municipalities and other
development agencies. Plantation B also sponsors other non-Fairtrade farms that belong to
the BANAFRUT Group, supported the construction of a church, improved a school’s
infrastructure, and implemented agreements with Compensation Fund Agencies to offer
courses and recreational activities to workers’ families. Plantation C offers health aid to
sick people and elders, recreational and cultural activities, Christmas gifts for children, and
is initiating a programme for microenterprise creation, in addition to supporting the
FUNTRAJUSTO initiatives (see Table 18).
It highlights that workers consider that the main changes in plantations after Fairtrade
certification were: all of them mentioned the reduction in the use of agrochemicals; 84%
said they receive more training; 77% pointed out that there are less work-related accidents;
73% affirmed that workers are more empowered (participate in decision-making and are
more motivated); 54% expressed improvement in agricultural technology; 41% mentioned
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 76
more permanent contracts, and 39% said that management–worker relations are much
better.
Additional expenditure made for certifications
Plantation A invested USD 98,000 and Plantations B and C USD 70,00081
in the last
three years to comply with Fairtrade requisites. The first plantation invested in improving
the water-treatment plant, in chlorination and disinfection systems, in sink and drainage
repair, in locative and structural adjustments, in waste water and waste solids management,
in sanitary facilities, etc. Plantation C invested in maintenance of plantations and irrigation
systems. Plantation B did not provide data on additional investments and expenditure made
to comply with Fairtrade requirements.
In the last three years, the three plantations spent more than an additional USD
597,000 and 296,000 respectively82
due to its Fairtrade affiliation. Plantation A spent on
the following items: cost of the worker and employee time spent in administration of the
Premium, implementation of the Quality Management System (QMS), strengthening of the
human resources function by incorporating a medical doctor for Occupational Health and
related programmes, labour costs related to extra meetings of representatives, increase in
time span for workers’ return after agrochemical application, mechanical weeding (85
workers), cost of kudzu seed for use as noble vegetable cover, PPE, and direct costs of
Fairtrade certification. Plantation A also spent USD 5,179 annually in the last three years
for GlobalGap certification. Table 22 summarizes, for year 2012, investments and
expenditures related to certifications, amount of Premium received, and gross income from
banana sales.
Table 22. Investment and expenses to comply with Fairtrade and GlobalGap
standards, Premium value and gross income for Urabá plantations studied
(USD), year 2012
Plantation
Investment
related to
Fairtrade
certification
Annual
expenses related
to Fairtrade
certification
Annual
expenses related
to GlobalGap
certification
Amount
received in
Fairtrade
Premium
Gross
income from
banana sales
Plantation A 27,886 215,198 5,321 1,317,908 10,387,000
Plantation B83
– – – 252,091 2,593,419
Plantation C 12,270 29,838 – 61,350 506,492
81
The amount for Plantation B is an estimate by the authors, since managers did not provide any financial
data. 82
The amount for Plantation B is an estimate by the authors, since managers did not provide any financial
data. 83
The plantation did not provide any financial data, except for the amounts received due to Fairtrade
Premium and its distribution. Gross income from banana sales is an estimate by the authors.
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 77
7.3 Fairtrade impact on hired workers’ organizations
Currently, all of the Fairtrade plantation workers surveyed belong to the labour union
SINTRAINAGRO, and most attend its annual meetings and training sessions. These
events take place in parallel when air fumigations are conducted to save time.84
Workers
were aware of the following labour rights: salary according to collective bargaining, non-
discrimination, non-harassment, freedom of association, access to PPE, medical care in the
workplace, appropriate sanitary facilities in the workplace, and sickness leave. No worker
mentioned having suffered violation of any of their rights.
It is highlighted that in addition to the Labour Union and Joint Bodies,
FUNTRAJUSTO was constituted, a collective initiative of most of the Joint Bodies in
Urabá, which works together with municipalities and other local development agencies in
the planning and execution of community projects. Other workers’ organizations were not
identified in this study. Additionally, it was detected that the participation of workers in
other community organizations or in organizations with political incidence was low.
All of the workers surveyed trust that the organizations representing them are
conducting proper negotiations with their respective plantations. Plantations offer
appropriate conditions to develop and negotiate workers’ concerns. Most workers declared
that plantations have the capacity to listen to them and to respond adequately. It is
underlined that all of the workers mentioned that they have a good relationship, involving
respect and admiration, with the plantation owners. A few cases were reported where
workers raised their concerns with management, but these were always resolved.
93% of the Fairtrade plantation workers trust their plantation’s management, and 87%
think that their wages were calculated transparently. In the Control plantation, all workers
also trust their management and think their wages were calculated correctly. All of the
Fairtrade plantation workers believe they now have a greater capacity for controlling their
and their family’s future.
In relation to the Joint Body
All of the workers consider that their influence in Joint Body decision-making has
increased since their creation. Most affirm that their capacity for transmitting ideas and
concerns to the Joint Body is high, as well as the ability of the Joint Body to listen and to
address their needs. However, in a focus group session at one of the plantations, workers
mentioned that their participation in the Joint Body’s decision-making processes tends to be
passive; furthermore, in this sense, workers’ relatives expressed their wish that their
opinions were taken more into account. 86% of the workers have little information in
relation to community-level projects and training funded with the Fairtrade Premium.
By means of training and promoting exchanges with other worker organizations,
Fairtrade has helped reinforce the capacity of worker representatives in the Joint Body and
Labour Union. This has resulted in greater influence in decision-making. All of the
84
Workers are not allowed to work in the fields after air fumigation.
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 78
workers said that they completely trust the work of the Joint Bodies. Most workers
affirmed that they know who the members of their Joint Body are, and rated their capacity
for performing their work as 4.5 (where 5 is excellent and 1 is bad).
For all of the workers, the most important Premium project is “access to housing”,
and in all of the Joint Bodies, this has become the project with the most funding. It is
underlined that Joint Bodies have also assigned great importance to projects that benefit the
community (see Table 18).
7.4 Fairtrade impact on local and regional development
Fairtrade influence on employment and salaries in the region
Fairtrade has generated jobs in the region by contributing to the reactivation of
banana exports, by the implementation of Fairtrade Standards and by Fairtrade Premium
investment. All of the above factors result in higher, stable worker incomes and manual
weeding also increases demand for unskilled labour. Premium investment in housing
construction and improvement, household appliances, education and community assets
raise the local demand for goods and services, which in turn stimulates employment in local
commerce. All of the above has a multiplier effect that stimulates the regional economy in
general and, indirectly, generates further employment.
Workers have also become minor job creators, since 15% of them have invested an
average of USD 2,606 in income-generating initiatives. On the other hand, Fairtrade also
favors increased education and training of youngsters, which can expand opportunities for
them.
Labour conditions in the banana sector of Urabá are generally good. A paper
presented by AUGURA in February 2012 indicates that there is uniformity in the Urabá
work sector in terms of wage payments, because 98% of the workers are under the same
Collective Bargaining Agreement led by AUGURA and SINTRAINAGRO. Salaries are
Female worker at a packing plant in
one of Bananeras de Urabá farms
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 79
increased according to the consumer price index.85
Therefore, although Fairtrade influence
in salary levels and working conditions is positive, the difference in salary between
Fairtrade and non-Fairtrade workers is minimal. Table 12 confirms this statement because
the average annual income in 2012 of workers in the Control plantation was USD 8,355
which is similar to the average annual income of the three Fairtrade plantations (USD
8,674). Fairtrade has contributed to the improvement of salary conditions because now
more workers have labour contracts and are paid the legal social benefits.
As already mentioned, 39% of Fairtrade plantation workers think that their wage
level is on average 56% above the regional average, and 54% believe it is the same. This
perception is interesting but it seems to be exaggerated, because Table 12 also shows that
Plantation A and C have similar wage levels as the Control plantation. However,
Plantation B does have higher average wage levels than the rest of the plantations,
including the Control plantation. An explanation for this positive perception of their wage
level by Fairtrade plantation workers can be that, as was expressed by the Control
plantation workers, wage and labour conditions in the Control plantation are above average
in the region. According to respondents, this was the plantation owner’s approach to
diminish workers’ enthusiasm towards joining the labour union, SINTRAINAGRO.
Although the legal and extra social benefits paid in Fairtrade are higher than those paid
outside of Fairtrade, the unemployment level in the region tends to apply a downward
pressure on wages for unskilled workers. It should be recalled that one of the plantations
reduced its labour force because of profitability problems.
Access to services at the regional level
As already mentioned, Fairtrade stimulated the local economy, and therefore raised
the demand for goods and services such as household appliances, motorcycles, construction
and education, in addition to public and community services in the region. Fairtrade has
activated demand for services such as EPS (health), electricity, gas for cooking, piped
water, sewage, garbage disposal and insect control. Demand has expanded for credit and
financial services, and for primary, secondary and university education. The academic
sector has grown rapidly in response to the booming demand for education, partly
generated by Fairtrade, although many of the academic institutions that have emerged
provide low-quality services. Additionally, Premium investment has favored the supply of
new or improved services for the community, such as parks, schools, hospitals, sports
courts, church, nursing homes for elders, etc.
FUNTRAJUSTO, the collective initiative of most of the Joint Bodies in Urabá, is a
new provider of community services, since it works together with local governments and
development agencies in the planning and execution of community projects. The study also
evidenced that other agencies are supporting local activities and services. For example,
Plantation A has an alliance with COMFENALCO (a family compensation fund) for the
implementation of the Programme “Somos Familia”, focusing on the improvement of the
standard of living of the poorest families affiliated to the Corporation. Plantation C
established an alliance with the Municipality of Chigorodó, and their Joint Bodies have
85
Quesada, V.H. What can we learn from the banana experience in Colombia? FLO. March, 2013
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 80
partnerships with foundations such as Compartir to finance and execute community-level
projects. Plantation B also collaborated with COMFAMA (another family compensation
fund) in a study on workers and their families.
Finally, Colombia tends to have a weak government presence and high informality
levels in its rural areas. Small municipalities generally have scarce funds and tend to be
inefficient and corrupt. In consequence, it is considered that most of the services would not
exist without the Fairtrade Premium. However, the government is providing subsidies for
construction of workers’ housing, through the family compensation funds. SENA offers
technical training services to rural workers, but this agency was scarcely mentioned in this
study. Plantation A is joining forces with the Municipality to execute community
programmes, and the management representative on the Joint Body indicated that progress
has been made with respect to the lobbying capacity to obtain subsidies for workers from
the local government.
Political influence of hired-worker organizations
The most important achievement of the Joint Bodies of most Fairtrade-certified
plantations was the creation of FUNTRAJUSTO, a foundation focused on developing and
managing community projects. In 2012, Joint Bodies at Plantation B’s business group
designed common statutes and regulations. Additionally, Joint Body leaders meet in
annual events encouraged by Fairtrade for the exchange of experiences.
Fairtrade has supported the strengthening of workers’ leaders in the Joint Bodies
and Worker Committees86
so that they can adequately fulfill their mission of defending
rural workers’ interests. However, Worker Committees are only required when labour
unions are not present, which is not the case in Colombia. All plantation workers surveyed
are members of SINTRAINAGRO and the Corporations. Joint Bodies prepare annual
investment plans and timetables. The Corporation finances the training of Joint Body
members in pertinent topics like administration, accounting and project planning and
management. Some leaders have conducted technical studies in the local universities.
SINTRAINAGRO trains Worker Committee members on labour rights, labour union
formation, leadership, labour legislation, and other subjects such as payroll management,
occupational health, first aid, etc.
Plantation managers and Joint Body representatives declared that workers’
representatives are now better trained, more dedicated, and have become more analytical
and better managers and communicators. They now act as positive leaders who solve
problems. The Corporation at Plantation C does have some experience in public support
policy due to its alliance with the Chigorodó Municipality. It should be noted that, once the
period of the trained worker representative ends, new representatives are elected with little
training and experience, which affects the performance of the Joint Body. Additionally, the
study did not evidence that Worker Committees or Joint Bodies have any international
experience or at the public support policy level.
86
When there is no labour union in the plantation, Fairtrade certification requires the establishment of the
Workers Committee to protect workers’ rights and to provide a forum for workers to consult with
management on a range of matters affecting them.
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 81
Relationship of plantations with the armed conflict
The perception of plantation leaders is that the regional armed conflict does not
exist anymore; 98% of workers believe that the conflict diminished and 2% consider that
it’s the same, because common delinquency has emerged and theft has increased.
However, this situation is bearable and cannot be compared with the public situation that
existed 12 years ago when they confronted theft, murders, extortions, threats, forced
recruitment of workers and family members, and massive displacement. Plantation A
suffered damages to their buildings, trucks and banana-packing plants were set on fire, and
management had to suspend some of their activities and had to hire bodyguards to protect
agricultural technicians during their visits to the plantations. This affected agricultural
production, sales, and logistics. In the case of Plantation B, sometimes workers on their
way to the plantation had to go back because they were threatened.
57% of the workers consider that there is no relationship between Fairtrade and the
armed conflict. However, 43% believe that Fairtrade’s social and economic impact favors
peace in the region and consider that it is important for the plantations to continue their
affiliation because Fairtrade stimulates job creation in the region.
7.5 Fairtrade impact on natural resource management
Environmental policy
Fairtrade has promoted the production of quality products, environmental protection
and sustainable use of the natural resources. Plantation A has a soil protection programme
that encourages the planting of noble vegetable covers which lowers soil erosion and
protects the soil from chemical contamination after pesticide use. They have also decreased
herbicide application to lower air pollution levels, and they also avoid the use of pesticides
and nematicides. Plantation B boasts high-quality soil and conducts reforestation along the
channels and internal areas such as the packing plant. Likewise, Plantation C implements
an inorganic solids-recycling programme, ecological agriculture and soil conservation.
The Control plantation is aware of the need for environmental protection, but fights
diseases with agrochemicals to avoid their propagation. The Control plantation applies 5.2
liters per hectare of pesticides to control diseases, an amount that is average for the region,
but it tries to manage them carefully to minimize the damage to workers’ health.
Use of agrochemical inputs
Plantation A, because of banana diseases that resulted in financial loss and lower
yields, was forced to use herbicides and fungicides once again to improve their fruit
production. Similarly, Plantation B has used agrochemicals since 2010 when Fairtrade
International removed restrictions on their use. Plantations are aware that the use of
agrochemicals is not ideal, so they have the following strategy to mitigate negative impact:
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 82
A rational use of agrochemicals, protecting water sources and biodiversity, and the
health of workers involved in the activity.
Workers have been trained in the use of pesticides and use PPE (overalls, gloves,
masks and caps).
Agrochemicals are deposited away from areas where bananas are stored and
processed.
Warehouses where pesticides are stored are kept shut and locked and access for
unauthorized personnel is restricted.
Agrochemical transportation is conducted with specialized vehicles.
Plantation B has implemented an Environmental Management Plan and Plantation C
avoids herbicide use. The latter plantation considers that this strategy has favored a change
in the workers’ attitude towards the company, and labourers are more motivated because
they perceive the company’s interest in their welfare.
Table 23 describes the amount of herbicide used per plantation in the last three
years, after Fairtrade International authorized its use. As can be observed, while Plantation
A is increasing consumption due to its earlier problems with weed control, Plantation B is
lowering it, and Plantation C, a small plantation, does not use herbicides at all because it
has been successful with mechanical weeding.
Table 23. Herbicide consumption (cc/ha), years 2010-2012
Herbicide consumption (cc/ha)
Plantation 2010 2011 2012
Plantation A 707 2,804 3,498
Plantation B 1,700 1,000 800
Plantation C 0 0 0
Plantations conclude that Fairtrade has contributed to a more sustainable banana
production. Workers have been trained in subjects like sustainable production, biodiversity
conservation, and health and security in the workplace.
To comply with Fairtrade standards, plantations have adopted the following
environmental conservation techniques: rational use of herbicides, maintenance of noble
vegetable covers, planting of “bore”87
in the main channels, biodiversity protection,
drainage improvement for septic tanks, reforestation, improvement of sanitary units, and
buffer strips along rivers. Plantation A is currently recycling the water used in the process
for up to six months, and all of its farms are implementing the “Conservation Plan”.
87
Alocasia macrorrhiza (L) Schott. This is a large plant that captures solar energy efficiently under shaded
conditions and converts it into starch. It is used to feed fish and pigs.
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 83
7.6 Conclusions and recommendations for plantations
7.6.1 Conclusions on Fairtrade impact
General
The study confirmed that Fairtrade has had a significant positive impact on hired
workers in Fairtrade-certified banana plantations of Urabá in the last three years. This
impact has taken place at the level of hired-worker households, plantations, hired-worker
organizations and communities in the plantations’ areas of influence. This favorable
impact is the result of the implementation of Fairtrade instruments such as the Premium, the
minimum price throughout the year, the promotion of democratic hired-worker
organizations, and the several standards related to labour conditions, environmental
protection, production infrastructure and traceability in plantations.
The Fairtrade Premium totaling USD 6.16 million for all affiliated plantations in
Urabá was invested in 2011 as follows: 62% in workers’ housing construction and
improvement; 29% in recreational and cultural programmes, medical assistance,
community assistance and response to natural disasters; and 9% in education and training
programmes. In 2012, the three Joint Bodies studied invested the Fairtrade Premium
mostly in services for workers such as loans for housing improvement, scholarships, health
and academic aids, training, and reinforcement of collective action. Currently, the most
important Premium-funded project for the hired workers and Joint Bodies studied is to
achieve home ownership for all workers. 52% of workers improved their housing in the
last three years, and most have basic services in their home.
Joint Bodies invested a relatively low Premium percentage on community projects,
such as civil construction and donations. The study suggests that most investment in
workers’ and community well-being is funded by the Premium and in much lesser
proportion by the plantation or private sector foundations.
Hired workers
Fairtrade impact at the hired-worker and household level includes better labour
conditions such as higher salaries, payment of legal and extra social benefits, and greater
job stability. Although control plantation workers exhibit higher salaries than workers in
one of the Fairtrade plantations studied, only 16% of them have indefinite-term contracts
compared to almost 100% in Fairtrade plantations.
All the workers think that their quality of life with Fairtrade is better and most think
the same about their current economic situation. 74% of workers affirm that their per
capita income is enough to cover their basic needs. No worker mentioned having food
security problems. Wage levels of indefinite- and fixed-term contracts in the plantations
studied reached a peak in 2011 but were lowered in 2012 and remained the same for 2013.
This suggests that private sector–labour union relations are mature because both parties are
making sound, objective decisions.
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Fairtrade has also contributed to workers’ health improvement by expanding access
to PPE, occupational health, adequate sanitary services, and dining halls at the workplace.
They also receive training on health-related topics and benefit from the lesser use of
agrochemicals and reduction of work-related sickness and accidents. The percentage of
Control plantation workers that missed work due to sickness were double the percentage of
those working at Fairtrade plantations, and their leaves of absence were much longer.
Workers are also offered other services such as training, recreation, social support,
and credit. 96% of workers obtained a loan, mostly from the plantation or the Corporation.
In contrast, 83% of Control plantation workers received loans from informal sources.
Hired workers have access to educational support and scholarships for family members, but
only 33% of Control plantation workers received scholarships versus 68% Fairtrade
workers. All Fairtrade workers also enjoy freedom of association (all are members of
SINTRAINAGRO) and have increased their personal savings. However, Control
plantation workers save on average almost three times as much as Fairtrade workers.
Plantations
Fairtrade affiliation coupled with GlobalGap certification opens preferential markets
for plantations because of the resulting good quality of the fruit. Fairtrade impact involved
increased sales volumes and higher prices for Fairtrade-certified bananas. Although the
total annual volume of banana boxes sold by the plantations studied decreased in the last
three years, the percentage of boxes sold on Fairtrade terms actually increased, to an
average of 78%. Managers interviewed lacked a consensus on the Fairtrade effects in
plantation profitability; while one said that Fairtrade had slightly lowered it, the other two
declared that Fairtrade had increased it. One of them indicated that the profitability
increase had been small, but that joining Fairtrade was justified. However, managers
agreed that the minimum price for Fairtrade-certified bananas was very similar to its
production costs, so profitability levels are minimal for plantations.
In the last three years, the three companies invested around USD 167,400 to comply
with Fairtrade requisites, in the improvement of plantation and water treatment
infrastructure, among other items, and also spent almost an additional USD 891,000 to
reinforce the business structure, expand services to workers, and to cover increased labour
costs. Nevertheless, Fairtrade affiliation has also resulted in a notable reduction of direct
investment in workers by the plantations, because services demanded by workers are now
channeled through the Joint Body and covered with Premium funds.
Improved labour conditions for hired workers, like stable contracts and occupational
health plus the creation and good functioning of Corporations and Joint Bodies, have
improved relations and communications between management and workers, and worker
motivation, participation and commitment have grown.
In plantations, Fairtrade has also supported improvement of banana-production
technology, greater environmental protection and rational use of agrochemicals. However,
annual average banana yields for all three cooperatives have been decreasing (43 tons/ha in
2010, 40 tons/ha in 2011, and 39 tons/ha in 2012) caused by climatic changes (periods of
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 85
drought and excessive rainfall), and in the case of the largest plantation, due to problems
with manual weed control. Managers said that lowering agrochemical application for pest
and disease control is more feasible in the smaller plantations. The Control plantation
produces slightly higher yields.
Worker organizations
Fairtrade impact on Joint Bodies has resulted in greater worker participation in
decision-making and strengthening of leadership and human capital of worker
representatives. An Annual Plan is prepared for the adequate administration of the
Fairtrade Premium. Workers express a solid credibility of workers in the Joint Body, and
finally the Joint Bodies have developed a service portfolio directed to workers, including
credit, training and educational aid.
Region
Fairtrade has generated jobs in the region by contributing to the reactivation of
banana exports, by the implementation of Fairtrade standards and by Fairtrade Premium
investment. All of the above factors result in higher, stable workers’ incomes and manual
weeding also increases demand for unskilled labour. Premium investment in housing
construction and improvement, household appliances, education and community assets
raise the local demand for goods and services, which in turn stimulates employment in local
commerce. All of the above has a multiplier effect that stimulates the regional economy in
general and, indirectly, generates further employment.
Labour conditions in the banana sector of Urabá are generally good. There is
uniformity in terms of wage payments, because 98% of the workers are under the same
Collective Bargaining Agreement led by AUGURA and SINTRAINAGRO. Salaries are
increased according to the consumer price index. Therefore, although Fairtrade influence in
salary levels and working conditions is positive, the difference in salary between Fairtrade
and non-Fairtrade workers is minimal. Fairtrade has contributed to the improvement of
salary conditions because now more workers have labour contracts and are paid the legal
social benefits.
FUNTRAJUSTO, a collective initiative of most of the Joint Bodies in Urabá, was
constituted to work together with municipalities and other local development agencies in
the planning and execution of larger community projects. Other agencies are supporting
local activities and services; one plantation has an alliance with COMFENALCO (a family
compensation fund) for the implementation of the Programme “Somos Familia”, focusing
in the improvement of the standard of living of the poorest families affiliated to the
Corporation. Another plantation established an alliance with the Municipality of
Chigorodó, and their Joint Bodies have partnerships with foundations such as Compartir to
finance and execute community-level projects. Another plantation also collaborated with
COMFAMA (another family compensation fund) in a study on workers and their families.
Finally, Colombia tends to have a weak government presence and high informality
levels in its rural areas, and small municipalities generally have scarce funds. Hence, it is
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considered that most of the services would not exist without the Fairtrade Premium.
However, the government is providing subsidies for construction of workers’ housing,
through the family compensation funds and a Joint Body management representative
indicated that progress has been made in improving lobbying capacity to obtain subsidies
for workers from the local government.
7.6.2 Recommendations
Fairtrade System
It is recommended that Fairtrade International revise the banana sales price and adjust
it to reflect realistic production costs according to Fairtrade principles.
It is also recommended that Fairtrade International carry out additional research as to
whether services formerly financed by the plantations are now covered by Fairtrade
Premium funds, which might suggest that Premium funds bring in less extra income for
workers.
Joint Bodies
It is suggested, as a strategy to stimulate household income diversification, that
Joint Bodies establish “business incubators” to advice, coach and fund microenterprises
with the participation of interested women and youngsters.
It is recommended that a greater percentage of the Fairtrade Premium be invested in
community-level projects and that Joint Bodies and FUNTRAJUSTO continue to develop
strategic alliances with public and private agencies to attract counterpart funding for these
projects. It would be appropriate to explore possible counterpart funding by the banana
plantations and their foundations for community projects.
It is important to continue training programmes for Joint Body workers’
representatives, to reinforce their participation and leadership in meetings, and to encourage
them to take note of workers’ household members’ ideas on how to spend the Premium.
Plantations
It is recommended that plantations request Fairtrade International to revise the
banana sales price and adjust it to reflect realistic production costs according to the
Fairtrade principle: “Fairtrade prices respond to the real production value”. In
addition, to determine precisely the effect of Fairtrade affiliation on plantation profitability,
it is suggested that a cost/benefit analysis be conducted of the Fairtrade banana business of
different plantations with different production scales.
It is important that plantations continue to fund projects to promote social well-
being of hired workers, relatives, and the community in general. It is important that the
direct investment by plantations be supplementary to Premium-funded investments.
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It is suggested that the plantations or AUGURA approach the banana research
institute, CENIBANANO, to request additional research on alternative ways to control
banana weeds, pests and diseases in large banana plantations to reduce dependence on
agrochemicals.
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Annexes
Annex 1. Terms of Reference for Fairtrade Impact Study
Annex 2. Research Questions for the Fairtrade Impact Study
Annex 3. Inventory of Instruments used in Fairtrade Impact Study
Annex 4. List of Interviews to other Actors and Support Institutions
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 89
Annex 1. Terms of Reference for Fairtrade Impact Study
Assessing the Impact of Fairtrade
for Colombian Banana Farmers and Workers
1. Introduction
This document is intended to outline the scope and objectives of a study, commissioned by Max
Havelaar Netherlands in close cooperation with the Fairtrade Foundation UK and Fairtrade
International88
, on the impact of Fairtrade certification for banana smallholders and plantation
workers in Colombia. The study should especially be considered as complementary to the banana
sector study, commissioned by the Fairtrade Foundation in the UK and published in December
2011, and should be limited in terms of time and costs.
Fairtrade International and the Labelling Initiatives refer to impact assessment as describing an
assessment at a specific point in time. It verifies whether the intended objectives are being achieved
and what difference this is having for the people involved. Impact assessment studies are usually
undertaken after a long enough period for the results of interventions to be evident – typically 3-5
years.
2. Background
As the volume and value of Fairtrade sales grows across the world there is increasing demand to
measure and demonstrate that engagement with Fairtrade has made a difference for anticipating
plantations and workers (and their families) in developing countries, as well as the wider
community – in other words the impact that Fairtrade has had. This demand comes from a variety
of stakeholders including consumers, the media, political authorities, funding donors and supply
chain actors (licensees and retailers) who have a legitimate interest in learning whether the Fairtrade
labelling system is meeting its aims and objectives and improving the situation of plantation
workers.
There is also a need to understand and communicate about the effectiveness of the tools and
processes used to achieve the objectives of Fairtrade labelling. Impact assessment therefore also
provides a useful and systematic way for producers to work in partnership with FI and share
knowledge of what has gone right and wrong in the past and why, and to ensure that lessons are
learnt and positive change is effected.
Fairtrade commissions a number of impact assessments annually, in order to deepen our understanding
of the contribution that Fairtrade is making to poverty reduction and development. Within FI, the
Strategy and Policy Unit (SPU) is responsible for creating and ensuring a sound strategy and policy
framework for the work of Fairtrade International.
88 Max Havelaar Netherlands and the Fairtrade Foundation are two of in total more than twenty Fairtrade partner
organizations called Labelling Initiatives (LIs). The LIs ensure that the Fairtrade certification mark is being used correctly
in the different countries were Fairtrade products are being sold. Fairtrade International (FI) is the umbrella body of the
national Fairtrade labelling initiatives. This body for Fairtrade globally provides standards setting, producer support and
policy advice for the international Fairtrade system. Within FI the Strategy and Policy Unit (SPU) is a.o. responsible for
the co-ordination of impact research and monitoring and evaluation for Fairtrade.
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 90
3. Relevance and current situation
3.1. Relevance
In 2011 Fairtrade Foundation, in close cooperation with Fairtrade International, finalized a profound
sector study on bananas, including research among Fairtrade partners in the Dominican Republic,
Ecuador, Ghana and the Winward Islands89
. Colombia was not included in that research, mainly
because the role of Colombia in supply at that time was still limited and because of safety reasons. That
situation has changed and nowadays Colombia is among the most important countries which supply
bananas to the Fairtrade market. Though the former sector study is able to draw conclusions about the
banana sector as a whole, some research in Colombia might still result in a useful addition to the former
research results, while some specific impact issues in the particular Colombian context will be of
interest as well.
Both in the UK and the Netherlands, Colombian smallholder organizations and plantations are
nowadays one of the main suppliers, mainly through the companies of Uniban and Fyffes. Max
Havelaar Netherlands therefore commissions this study, but in close cooperation with the SPU of FI
and the Fairtrade Foundation in the UK.
The study could also act as a useful addition to the evaluation of a Public Private Partnership to
improve the situation of the Colombian banana sector, enabled by the Dutch Ministry of Foreign
Affairs. This is a joint project (2012-2014) of the Colombian banana sector, import company Fyffes,
Max Havelaar Foundation and the Dutch Embassy in Colombia. Many involved groups of banana
growers are at the same time Fairtrade certified and benefit from Fairtrade sales, while Fyffes is one of
the most important importers of Colombian bananas selling to the Dutch and British Fairtrade market.
3.2. Current situation
By the end of 2011 there were 29 Fairtrade International certified producers in Colombia. Six of them
are small farmer cooperatives in the Magdalena region, while two are associated worker cooperatives in
the region of Urabá. All the other partners are plantations with hired labour in the Urabá region. Most
of the producers commercialize their Fairtrade bananas through the export company of Uniban, one of
the biggest exporters in Colombia. Only eight plantations are associated to Banafrut, while one
cooperative sells via Banasan. The impact research will cover both regions, different supply chains and
both smallholders and hired labour plantations.
Colombia faces a specific situation, as the economic operations were affected by many years of
conflicts between the government army, drug interests, guerilla and paramilitary groups. At this
moment the country, including the banana sector, is recovering from this conflict period. But this
political conflict situation might influence the results of this impact research in a special way. The
conflicts are one of the reasons that Fairtrade sales of bananas from Colombia has come up strongly just
recently.
4. Overall aim and objectives
Fairtrade’s vision is of ‘a world in which all producers can enjoy secure and sustainable livelihoods,
fulfil their potential and decide on their future’. Fairtrade’s mission is ‘To connect disadvantaged
producers and consumers, promote fairer trading conditions and empower producers to combat
poverty, strengthen their position and take more control over their lives.’
89 Fairtrade bananas: A global Assessment of Impact, IDS of University of Sussex, 2010.
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4.1. Aim
This project will explore and assess the impact of being part of Fairtrade for banana farmers and their
organizations and for banana workers in Colombia.
The impact assessment will test the following hypothesis: Fairtrade tools (producer and trade standards,
Fairtrade prices and premiums, Fairtrade certification, Fairtrade producer support, Fairtrade market
access) have had positive impacts on small-scale banana farmers and plantation workers in Colombia.
We are interested in the following types of impacts:
Economic, environmental and social development impacts for participating farmers and
workers.
Impacts on farmer and worker organization, organizational capacities and organizational
strengthening.
Development impacts at household and community level.
Impacts on the position of small farmers in national banana supply chains.
We are particularly interested in understanding how these impacts are contributing in this context to the
achievement of the Fairtrade development goals:
1. sustainable livelihoods,
2. collective and individual empowerment, and
3. making trade fair for poor farmers and workers.
Because of the available sector study about Fairtrade bananas and because of the special focus on one
country, it is not considered urgent to do a full profound study in Colombia. The intended research will
have to be a derivative version, including less topics and therefore less time- and cost-consuming. But
as no earlier data are available, a stronger focus will be on the collection of baseline data, while also the
specific context in Colombia has to be addressed. Despite the specific situation, specific aims and the
limited scope, the Colombia research should, together with the former banana sector study, be able to
draw comparable conclusions on the impact of Fairtrade among banana partners in Colombia.
4.2. Objectives
This impact assessment has a focus on the Fairtrade impact of both smallholder organisations and
plantation workers of the banana sector in Colombia. The general objective is to gain
understanding of the benefits and challenges brought about for producers and workers, their
organizations and their local community, due to participation in the Fairtrade system. More
specified, the objectives of the study regarding the two categories of partners are different90
.
Plantations or Hired Labour Organisations
1) Understand the aims and objectives of workers in terms of living and working conditions (also
taking into account gender dimensions and seasonal workers), as well as personal development and
empowerment.
2) Assess the role that Fairtrade has played in helping workers progress towards their development
goals. Special attention will be paid upon the role of Fairtrade regarding the working conditions of
female workers.
90 For a further guiding of research questions: see annex 1 and 2.
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 92
3) Understand the aims and objectives of management in terms of sustainable development of the
plantation and empowerment of the workers, and to assess the role that Fairtrade has played in
helping them progress towards these goals.
4) Assess the role of Fairtrade in helping banana plantations’ management to improve occupational
health and safety conditions and to reduce the impact on the environment.
5) Understand the effects of a minimum price and in particular the use and effects of the premium, to
analyse the development of the product price and to assess what effects a minimum price protection
had/has on the wage level and the resources approved for Fairtrade activities during working hours.
6) Assess the impact that being part of Fairtrade (e.g. Joint Bodies, Workers Committees and Liaison
Officers) further collabouration of workers within or between different plantations, on the role of
trade unions within plantations and in the region, on Freedom of Association and on Collective
Bargaining capacities and outcomes.
7) Assess the impact that being part of Fairtrade has had on the surrounding community.
8) Assess the extra expenses plantations had/have to made to meet the requirements of the different
(Fairtrade and non-Fairtrade) certifications.
9) Assess the general benefits and extra income as a result of the different certifications.
Smallholder organizations
1) Understand the aims and objectives of the smallholder organization and their farmer members in
terms of living and working conditions, sustainable development and empowerment.
2) Assess the role that Fairtrade has played in helping organisations towards their business operations
and their social and environmental development goals, with special attention for the ability of
organisations to enter and compete in the external market.
3) Assess the role that Fairtrade has played in helping farmers progress towards their development
goals.
4) Explore how the practices and behaviour of actors in Fairtrade supply chains (exporters, traders,
processors, retailers, etc.) impact upon producers and assess the effectiveness of Fairtrade tools for
strengthening the producer’s position in the chain.
5) Understand the effects of a minimum price and the use and effects of the premium, to analyse the
development of the product price and to assess what effects a minimum price protection had/has on
the income level of the farmers and on the services provided by the organisation.
6) Assess the extra expenses associations as a whole and individual banana growers had/have to made
to meet the requirements of the different (Fairtrade and non-Fairtrade) certifications.
7) Assess the general benefits and extra income as a result of the different certifications for smallholder
associations and individual growers.
Context specific
In addition, we want to be able to capture the context-specific impacts and effects. In the case of
Colombia we refer specifically to the impacts of Fairtrade banana production in relation to the
associated conflicts in this country:
How do the Fairtrade organizations, farmers and workers relate to the ongoing conflict dynamics in
the region and country?
What are the current economic and social dynamics of this situation, and to what extent does
Fairtrade bananas represent a viable improvement compared to the threats in the country?
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 93
5. Methodology
5.1. Research Approach
5.1.1. Areas of impact
Fairtrade has developed a standard methodological approach for undertaking impact assessments. This
will act as a guideline, as the methodology is currently under review. The full methodology will be
made available to the research team. However, it should be noted that this study will be a limited
version from the standard one as it will not research as many areas as normally defined in the full
methodology.
The areas of impact that are of primary relevance in this study are:
1. Changes in the socio-economic situation of producers/workers and their households;
2. Changes in the organization of producers/workers;
3. Changes in local/regional development;
4. Changes in the management of natural resources.
For each area of relevance, the Fairtrade methodology has developed specific research questions for
researching and establishing impacts at the individual, household, community and sectorial levels. The
exact questions and indicators to be used will be developed in consultation with the project co-
ordinator, the Impact Assessment Manager of FI and with the producer organizations concerned.
5.1.2. Selection of producer groups and interviewees
In Colombia Fairtrade works with 29 banana partners (December 2011). Most of them are
plantations with hired labour and less than one third smallholder organizations. For the study we
have to make a cross-section of certified producers, that can represent all Colombian banana
partners. However, because of the specific focus of the PPP-programmeme on smallholders, all
smallholder organizations will be included. While the final selection of producers will depend on
producer interest and the approach of the research partner, it is proposed that the selection takes into
account:
A representative section of both smallholders and plantations: To get fair results,
smallholders have to be over-represented (because of the PPP focus even all smallholder
organisations in the Magdalena region will be included). So the proposed selection is six
smallholder organisations and three plantations.
Coverage of different supply chains, so at least channelling through both Uniban and
Banafrut have to be included. Proposed is to take two Uniban and one Banafrut related
plantation and take five smallholder organisations related to Uniban and one related to
Banasan (no smallholders are related to Banafrut).
Duration of Fairtrade certification: It is assumed that it takes time for both smallholder
organisations and their farmer members as plantations and their workers to see any
significant impact of participation in Fairtrade. For these reasons only those producer partners
that have been Fairtrade certified for three years or more will be invited to participate in this
study (not applicable to smallholder organisations).
The farm size and the volumes sold under Fairtrade: In order to compare, both partners with
big and small volumes Fairtrade volume will be selected.
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The geographic location: partners have to be selected from both the region of Magdalena
(mainly co-operatives) and Urabá (mainly plantations).
The situation of workers on the plantation: both partners where workers live on the plantation
and where workers come in from other regions/villages have to be selected.
The degree of women participation/influence within the partner organization.
Through the adoption of participatory methodologies, we are interested in determining which
impacts are of primary importance to farmers and workers, members of their households, and
members of the community. The researchers should endeavour to sample a representative group of
households, and to include men and women in the sample. A gender and diversity perspective cut
across all levels of analysis and categories of impact would ensure that viewpoints from all socio-
economic groups are investigated. The number of interviews can be increased when more financial
resources might become available.
5.1.3. Recall method
The use of control groups for establishing the counterfactual, i.e. what would have happened
without Fairtrade (and other certification schemes) is at least applicable to plantations in Urabá. For
plantations the use of a control group will therefore be considered strongly.
As all smallholders in the Magdalena region are probably already involved in Fairtrade, a control
group of smallholders might be difficult to determine. Either individual farmers which are not
members of the organisations or an association that is only recently Fairtrade certified might be
used as a reference. Besides, recall techniques will be used i.e. asking Fairtrade producers and
workers (and others) to recall what changes have occurred since their involvement in Fairtrade and
how they attribute these changes to Fairtrade and/or other actors such as NGOs, government and
other certifications. As studies in the Colombian banana sector have hardly been undertaken, the
alternative approach of measuring change over time by comparing the current situation of Fairtrade
producers with their situation upon entry to Fairtrade is not feasible either. The collection of
baseline data is therefore important.
5.1.4. Avenues of impact
There are six main strategies used to achieve the goals of Fairtrade. These strategies work in unison
to create an enabling environment for small producers and workers to make progress towards their
goals. The Fairtrade standards embody the principles of fair trade and set the ‘rules of the game’,
while the other strategies set out to enable engagement among producers, consumers, businesses,
civil society organizations and governments. Four of these strategies are relevant for this research.
There are various potential channels through which Fairtrade impact for producers may develop.
The study should consider the extent to which each of these strategies are relevant:
1. Setting and verifying standards for fair trading practices, good governance, empowerment,
labour rights and environmental sustainability in Fairtrade supply chains.
2. Building markets for Fairtrade-certified goods through creating consumer awareness and
demand and encouraging and enabling businesses and public sector organization’s to source
from Fairtrade producers.
3. Providing support (organizational, technical and financial) to producers and workers and
facilitating access to support from others.
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4. Forming networks and alliances between small producers and workers for exchange,
cooperation and influence, and with partner organizations to achieve common goals (also
informal ad-hoc organization facilitated through participation in Fairtrade system).
The exploration of impact through these strategies is aimed at facilitating learning within the Fairtrade
International system. An important part of this will be reviewing trading relations between producers
and their buyers in the international trading chain, to establish the role they play in establishing impact.
To this end, researchers should discuss the functioning of each tool with producers and other relevant
stakeholders such as traders (including traders based outside of Colombia) and trade unions, and ask for
their recommendations on potential improvements.
5.2. Background documentation
The research team will have access to various background documents, including:
A Methodological Guide for Assessing the Impact of Fairtrade, prepared for Fairtrade
International, Nicolas Eberhart and Sally Smith, August 2008.
Fairtrade Bananas: A global assessment of Impact, Sally Smith/IDS Sussex, April 2010
Impact of Fairtrade bananas - summary and management response, Fairtrade, December 2011
Audit reports for the participating producer organizations. These reports are confidential, so they
can only be used after approval by the participating producers.
Fairtrade Small Producer Standards, Fairtrade Standards for Hired Labour, Fairtrade Trade
Standards, Fairtrade Standard for Fresh Fruit for Small Producer Organizations and Fairtrade
Standard for Fresh Fruit for Hired Labour.
PPP Business Plan - Banana and Plantain in Colombia, 2012.
Reports carried out by Producer Support Relations (PSR) of Fairtrade International in 2012. For
this purpose, producers were visited and interviewed and the information can give an idea about
the situation of the Colombian producers. The research can build upon the information in this
assessment and the development goals identified by the producers (overlap with the PSR
assessment should be avoided during the research).
5.3. Project outline
It is anticipated that the study will be delivered through three main phases of work:
Phase 1: Desk Research
Short literature review developing background information and analysis of the situation for
banana producers in Colombia.
Desk review of internal Fairtrade documentation about the participating Producer partners.
Phase 2: In-country field study
It is anticipated that the case studies with each producer organisation will capture both quantitative and
qualitative information, gathered from various sources, such as:
Survey in the field of a sample of farmers and workers (including some non-Fairtrade farmers
and workers), using a small set of key quantitative indicators. Case studies of Fairtrade
individual farmers and workers and their households are expected to be included in order to
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 96
provide a greater insight into livelihoods and Fairtrade’s impacts at the individual producer
level.
Semi-structured interviews, focus-group discussions and other participatory approaches with
producers/workers, groups of producers/workers and their families (men, women and children).
The producer organization leadership, agronomists and other technical assistants to the farmers
and workers.
Immediate buyers/exporters in Colombia, as well as a few in the Netherland and the UK, who are
working with the producer organizations.
Local Fairtrade International and FLO-Cert personnel.
Local or regional unions, involved in the banana sector.
Other key informants: possibly including but not limited to community leaders, NGO’s, persons
involved in training of farmers, workers and staff.
For qualitative data, it is expected that triangulation will be used to ensure robustness of findings.
Case studies of individuals and their households are expected to be included in order to provide a
greater insight into livelihoods and Fairtrade’s impacts at the individual producer level.
Wherever possible the study should include direct quotes from informants to illustrate common
findings and views. It should be clear to informants how the data they supply will be used and
that the study will be published. Informants should be able to speak anonymously if they choose
to.
The field research in Colombia should be complemented with telephone interviews with a few relevant
staff in Labelling Initiatives and importers in consumer countries.
The research team should present and discuss the initial findings with a team of representatives of the
producer organisations after the fieldwork phase (probably by e-mail).
Phase 3: Analysis, report writing, publication and dissemination
Following the research, the researchers should prepare short reports of the findings for each producer
organization studied (ideally in Spanish), a full overview report in English, and a summary report. The
producer partners will give feedback to the draft of their individual report. The full draft report will be
shared for comment (by e-mail) with a number of stakeholders, within an agreed timeline, prior to
finalization of the deliverables.
The researchers are also requested to prepare a powerpoint presentation, in English, summarizing
the research approach, key findings and recommendations. The researchers may be requested to
present the findings of the report to Fairtrade stakeholders at an appropriate forum. The final report
is expected to be made public (probably in November 2013).
5.4. Expected outputs
The researchers will be expected to deliver a range of specific outputs:
In advance of the research, a detailed methodology for the research.
Report of the findings, of which structure and format will be decided jointly by researchers and
Max Havelaar Netherlands/FI. In our view this should cover:
Brief reports of the findings for each producer organization studied (ideally in Spanish),
including processing context and all the basic data referring to the agreed indicators. The
report should also include an organizational chart and understanding of the premium use as of
date of certification.
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 97
Final report in English, including the assembly of findings of each Producer Partner. The
report should clearly describe the researchers’ conclusions as to the impacts of Fairtrade and
make recommendations to the Fairtrade labelling system and its stakeholders on how the
Fairtrade system can be further improved in the Fairtrade banana sector. Structure and format
of both the brief and the full report
A summary report in English (4-6 pages).
A powerpoint presentation, in English, summarising the research approach, key findings and
recommendations.
Underlying data of the research in an agreed format.
Photographs.
5.5. Research ethics
Methods: participation, gender, children
Through the adoption of participatory methodologies, we are interested in determining which
impacts are of primary importance to farmers and workers, members of their households, and
members of the community. The researchers should endeavor to sample a representative group of
households, and to include men, women, and children in the sample.
A gender and diversity perspective will cut across all levels of analysis and categories of impact to
ensure that viewpoints from all socio-economic groups are investigated.
Researchers should pay special attention to ‘atypical’ workers, such as child workers, as well as
migrant workers and subcontracted workers. Researchers should be able to assess if there are any
‘atypical’ workers working on the farm and plantation and should possess the appropriate research
skills to interview these workers and to assess their situation.
If in the research-gathering process individuals under 18 years of age are found in ILO 182
specified definitions of the Worst Forms of Child Labour (trafficked, bonded, forced, slave-like,
etc.), then information should be documented using the Fairtrade Child Protection policy and
procedures. The researchers must ensure that the said individuals are not harmed in any way
through either the research process or actions following the research process after the researchers
have left.
Individual members of the research team will be required to sign a confidentiality agreement which
determines how data and information shared and collected during the research may be used and
communicated.
5.6 Timeline
This is a short-term project: the entire research, including report drafting and finalization, is expected to
be accomplished in a total of (75 ?) working days, allocating at least (40 ?) days (incl. travelling) for the
fieldwork phase.
The research project should take place in the 4th quarter of 2012 and the 1
st quarter of 2013. The field
research phase is supposed to take place in February 2013 (provided that timing suits producer
organisations and workers). The first draft overview report of the study should be delivered by the end
of March. All deliverables for the project should be finalized by 30st of April 2013.
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 98
6. Application information
6.1. Expertise required by the contractor
It is expected that the studies will be conducted by an appropriate research team, that should be able
to demonstrate the following experience and capacities:
Experience of conducting impact assessments or other types of programmeme evaluation or
research (Essential);
Experience within a relevant programmeme context, e.g. research into value chains,
livelihoods, or other certification systems (Essential);
Understanding of Fairtrade principles, key tools and approaches (Highly desirable);
Understanding of banana sector, especially production and trade (Highly desirable);
Experience of working in Colombia (Essential);
Experience of implementing relevant research methodologies , including qualitative research
techniques like interviews, focus group discussions and sampling (Essential);
Language capabilities: fluency in Spanish and English, both in writing and verbal;
Experience and understanding of research ethics, including confidential issues;
Experience of participatory research techniques in a Latin American context (Desirable).
6.2. Terms of the contract
This is a short-term project: the entire research including report drafting and finalization is
expected to be completed within a maximum of (75?) consultancy days. Max Havelaar Netherlands
will provide all necessary information, background documents and guidance to the contractor.
Individual members of the research team will be required to sign a confidentiality agreement which
determines how data and information shared and collected during the research may be used and
communicated. Further details about Fairtrade’s confidentiality policy are specified in the contract
to be agreed between the researchers and Max Havelaar Netherlands.
6.3. Selection process
Interested parties are invited to submit tenders, including the following information:
Curricula vitae of the proposed research team members and any organizational affiliation.
Research proposal (project plan, timeline and methodology).
Proposed contract value and detailed budget.
Submission of two examples of recent relevant research (in English and Spanish), especially
of the involved researchers (so not only from the research institute as a whole).
References of two organizations for whom similar work has recently been carried out.
The selection process may include interviews, which will be held by telephone/skype.
Applications should be submitted to Jos Harmsen, [email protected]
Tel: +31-(0)30-2337083 or mobile: +31-(0)6-48505678
Deadline for applications: 30th of September 2012
Max Havelaar Netherlands,
August 30th, 2012
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 99
Annex 1: Guiding framework of research questions for Small Producer Organisations
Research Questions for Small Producer Organisations Relevant data
1. Changes in the socio-economic situation of farmers and their households
What is the supplement to farmer incomes generated by Fairtrade? Does this
supplement enable the households to:
‒ Meet their basic needs (food, clothing, housing, healthcare and
education)?
‒ Ensure a simple reproduction of the farm (maintain/replace the tools and
means of production)?
‒ Save money and make additional investments?
Farmer incomes and
standard of living
When additional investments are possible, where do they go? Are they:
‒ Investments related to the Fairtrade production?
‒ Investments in other activities in the farming system?
‒ Investments in other income generation activities and goods?
‒ Does Fairtrade lead households to specialize in the product related to the
Fairtrade market or does Fairtrade help to promote the diversification of
production-related activities?
Investment and
agricultural
diversification
Does Fairtrade enable small producers to avoid getting caught in the circle of
selling their products in advance for a low price in order to avoid cash flow
problems?
Does Fairtrade stabilise the income of small producers or promote the
creation of collective mechanisms which reduce cash flow problems (e.g.
advance payments by producer organisations, provision of inputs etc.)?
Cash flow
Does Fairtrade help to uphold small-scale farming and does it contribute to its
potential?
Does Fairtrade make small-scale farming attractive to rural populations?
Does it help to maintain rural young people in the region and avoid farm
abandonment and long-term migration?
If migration occurs, is it linked to processes of capitalisation supported by
Fairtrade (e.g. investments in education, savings etc.)
Upholding of small scale
farming
Levels of migration
Is Fairtrade a threat to household food security and does it increase the risk of
specialising in a product dependant on international markets? Food security
2. Changes in the organisation of rural zones
How does Fairtrade have a structuring effect in rural zones?
How does it improve farmers’ confidence and sense of self-worth?
How does it contribute to the development of producer organisations?
How does it help strengthen professional farming organisations at a local and
national level?
Organisation of rural
areas
Does Fairtrade help strengthen/consolidate the legitimacy and credibility of
organisations in the region? Legitimacy of producer
organisations
Does Fairtrade contribute to reinforcing democracy and social control within
the community?
Does it improve farmers’ capability to manage their organisations in an
efficient and transparent way?
Administration and
management capabilities
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 100
Does Fairtrade help strengthen capabilities to establish long-term and
diversified trade relationships?
Does Fairtrade help the organisations to compete with other big suppliers in
the country?
Does Fairtrade enable organisations to get higher prices and to be in a better
position on the conventional and speciality markets other then Fairtrade?
Does Fairtrade put some organisations in danger by making them dependant
on privileged markets?
Trading / commercial
capabilities and
bargaining capacity
with exporters/ buyers
Markets, sales, prices
Consistency of Quality
Productivity at farm-
level and organisation-
level
Understanding of
market needs
Does Fairtrade increase farmers’ possibilities of negotiation with other
stakeholders in order to obtain the appropriate support, loan services and
technical assistance, as well as local and national policies in support of local
producers?
Negotiation capabilities
(other than commercial)
Does Fairtrade help finance appropriate non-commercial services (e.g.
technical assistance, credit, transport, education etc.)? Development of Services
3. Changes in local and regional development
Does Fairtrade help to uphold or even create new jobs in rural zones
(temporary jobs, new services etc.)?
Is the socio-economic situation of permanent, temporary, seasonal or casual
workers hired by small producers improved as a result of Fairtrade (e.g.
through improvements in pay or working conditions)?
Does Fairtrade contribute to the development of new activities and economic
initiatives at a local level?
Does Fairtrade play a role in regulating prices for farmers in the local
market?
Does Fairtrade play a role in gender empowerment in the region?
Economic initiatives
and returns at local and
national levels
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 101
Annex 2: Guiding framework of research questions for Hired Labour Situations
Research Questions for Hired Labour situations Relevant data
1. Changes in the socio-economic situation of workers and their households
Does the guaranteed minimum price (where it exists) and other Fairtrade
trading standards permit a better profitability for the estate? Does Fairtrade
guarantee access to preferential markets? What influence does this have on
the motivation of owners to participate in Fairtrade?
Profitability /
sustainability of estate
Does Fairtrade help improve the economic situation of workers through
improved salaries and/or other financial work-related benefits (e.g. bonuses,
maternity or sick pay, etc.)?
Does the income earned by Fairtrade workers allow their households to:
‒ meet their basic needs (food, clothing, housing, healthcare and
education)?
‒ save money and make additional investments?
Worker income and
change in income
(increase / decrease
since Fairtrade
certification)
Does Fairtrade help improve working conditions (contracts, social security,
working hours, fair treatment etc.)? Are female workers equally treated?
Does Fairtrade improve the health of workers as a result of promoting
occupational health and safety?
Is Fairtrade beneficial for all social categories (e.g. men and women, young and
old, ethnic minorities, etc.) equitably? Does Fairtrade reduce, replicate or
increase social inequalities?
Working conditions
Worker health
Do the Fairtrade standards and/or Premium use contribute to improvements in
the standard of living of workers and their households (housing, health,
education etc.)?
Standard of living
Does Fairtrade help stabilise workers’ employment and income? As a result,
does it allow greater investments in education, health and pensions for
workers and their households?
Does Fairtrade allow workers’ households to make investments in other
economic activities?
Does Fairtrade help maintain young people in rural areas and avoid long-term
migration? If migration occurs, is it linked to processes of capitalisation
supported by Fairtrade (e.g. investments in education, savings etc)?
Security and
vulnerability
Levels of migration
2. Changes in the organisation of workers
Does Fairtrade help to structure or strengthen trade unions?
Does Fairtrade encourage the formation of alternative forms of worker
organisation (i.e. parallel means), other than Joint Bodies? Does this support
or undermine the position of trade unions in the region?
Structure and legitimacy
of trade unions
Does Fairtrade help improve workers' negotiation power? With regards
management? At a local level?
Does Fairtrade contribute to strengthen workers’ negotiation capacity for
collective bargaining?
Do workers have access to Fairtrade standards and inspection reports? Do
they use them in their negotiations with management? Do they participate in
addressing corrective actions?
Is access to means of production (land, water etc.) part of worker demands in
their negotiations with management?
Worker organisation
negotiation capabilities
Wage negotiations
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 102
Does Fairtrade improve the management capacity of worker representatives
to be able to participate actively in a Joint Body? In other forms of worker
organisation?
Does Fairtrade contribute to strengthen workers’ ability to participate and
request transparent decision-making processes from their representatives in
the Joint Body and/or other forms of worker organisations?
Worker organisation
management capabilities
What legitimacy does the Joint Body have with workers?
Does Fairtrade help to develop a common perception among workers on
priority needs of different social groups living in their area?
What legitimacy does the Joint Body have with the communities affected by
expenditure of the Fairtrade Premium?
Does Fairtrade contribute to the active cooperation of worker representatives
with other local stakeholders for the realisation of projects to improve
community services?
Legitimacy of Joint Body
3. Changes in local and national development
Does Fairtrade contribute to maintaining or even creating jobs in the local
area (temporary labour, new services etc.)? Are these jobs attractive for local
residents?
Does Fairtrade influence wages paid by other employers in the region? Does
it influence working conditions on other estates outside Fairtrade?
Is Fairtrade used as an income complement for smallholders in the area (as
temporary or seasonal workers)?
Employment
opportunities at local
and national levels
Benefits from Fairtrade
Premium to other
members of the
community (workers
who work on non-
certified farms)
Does Fairtrade contribute to the creation, maintenance or strengthening of
public and community services in the local or regional area?
‒ Does Fairtrade improve the participation of individual workers in the
decision making processes in their villages and living area (as citizens,
parents of students, members of churches etc.)?
‒ Does Fairtrade encourage national or decentralized public institutions and
private organisations to support local activities and services?
‒ Are activities and services financed by Fairtrade supplementary or
complementary to public sector support?
Access to services at local
and national levels
Does Fairtrade contribute to the development of new economic activities and
initiatives at the local level (individual or collective)? Economic initiatives at
local and national levels
Are workers organisations in contact with others organisations? Does
Fairtrade facilitate the exchange of experience and best practice among
worker representatives (in trade unions and Joint Bodies)? Are networks
developing?
Does Fairtrade help to strengthen trade unions and workers’ leaders in their
ability to defend the interests of the rural workers at national or even
international levels and to influence public support policies?
Political influence of
worker organisations
4. Changes in the management of natural resources
Does Fairtrade contribute to the production of high quality products,
reflecting standards and norms for sustainable agriculture? Quality and sustainable
agriculture
Does Fairtrade make more sustainable management of natural resources
possible? Limiting soil erosion? Good management of soil fertility? Good
management of water resources?
Soil and water
management
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 103
Does Fairtrade limit over-use of chemical products?
Does Fairtrade help promote the use of biological control mechanisms (e.g.
farmer trials, best practice exchanges between producer organisations etc.)?
Fertiliser and pesticide
use
Does Fairtrade contribute to the development of more environmentally
respectful and autonomous production methods? Environmentally
friendly management
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 104
Annex 2. Research Questions for Fairtrade Impact Study
Preguntas de Investigación e Indicadores de Cooperatives de pequeños productores
Preguntas de Investigación Indicadores
1. Cambios en la situación socio-económica de agricultores and sus hogares
Ingresos and level
de vida de PP
1.1. Cuál es el ingreso complementario de los PP
generado por el Fairtrade and por otras
certificaciones? Este ingreso adicional por el
Fairtrade permite a los hogares:
Satisfacer sus necesidades básicas
(alimentos, ropa, salud, and educación)?
Asegurar una sencilla reproducción de la
farm (mantener/reemplazar las herramientas
and medios de producción)?
Ahorrar dinero and realizar investments
adicionales?
% de PP que tienen otra certificación, además de Fairtrade
promedio anual estimado de ingresos adicionales para los PP
generados por el FT
promedio anual estimado de ingresos adicionales para los PP
generados por cada otra certificación, además de FT
rubros en los que los PP gastan su ingreso adicional por FT
rubros en los que los PP gastan sus ingresos adicionales por cada
otra certificación, además de FT
% de PP cuyos ingresos adicionales por Fairtrade les permite
satisfacer las necesidades básicas de alimentos en el hogar
% de PP cuyos ingresos adicionales por Fairtrade les permite
satisfacer las necesidades básicas del household (ropa)
% de PP cuyos ingresos adicionales por Fairtrade les permite
satisfacer las necesidades de atención médica básica del hogar
% de PP cuyos ingresos adicionales por Fairtrade les permite
satisfacer las necesidades básicas de educación del hogar
% de PP cuyos ingresos adicionales por Fairtrade asegura una
reproducción simple de la farm (mantener / reemplazar los
instrumentos and medios de producción)
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 105
Preguntas de Investigación Indicadores
% de PP cuyos ingresos adicionales por Fairtrade permite a sus
households ahorrar dinero
promedio anual estimado de dinero ahorrado por los PP que fue
generado por FT
% de PP cuyos ingresos adicionales por Fairtrade permite a sus
households realizar investments adicionales
Inversión and
diversificación
agrícola
1.2. Cuando las investments adicionales son
posibles, adónde van? Son inversiones:
Relacionadas con la production de FT?
En otras actividades en el sistema agrícola?
En otras actividades and bienes de
generación de ingresos?
El Fairtrade conduce a que los households se
especialicen en el producto relacionado con
el mercado de Fairtrade, o el Fairtrade ayuda
a promover la diversificación de las
actividades productivas?
promedio anual estimado destinado a investments adicionales
% de PP cuyas investments están relacionadas con la production FT
% de PP cuyas investments están relacionadas con otras
producciones no-FT
% de PP que invierten en otras actividades en el sistema de
producción
% de PP que invierten en otras actividades and bienes de
generación de ingresos
% de households PP que, conducidos por Fairtrade, sólo producen
bananos para el mercado FT
% de households PP, ayudados por Fairtrade, que producen otros
productos además de banano
Gastos adicionales
por certificaciones
1.3.1. Qué gastos adicionales han tenido/tienen
los PP individuales para poder lograr los
requerimientos de las diferentes
certificaciones de Fairtrade and otras?
1.3.2. Qué gastos adicionales han tenido/tienen
promedio anual estimado de gastos adicionales que los PP
individuales hicieron/hacen para cumplir con los requisitos de la
certification FT
promedio anual estimado de gastos adicionales que los PP
individuales hicieron/hacen para cumplir con los requisitos de
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 106
Preguntas de Investigación Indicadores
las cooperatives de PP para poder lograr los
requerimientos de las diferentes
certificaciones de Fairtrade and otras?
otras certificaciones no FT
promedio anual estimado de gastos adicionales que las
cooperatives hicieron/hacen para cumplir con los requisitos de la
certification FT
promedio anual estimado de gastos adicionales que las
cooperatives hicieron/hacen para cumplir con los requisitos de
otras certificaciones no FT
Flujo de efectivo
1.4.1. Permite el Fairtrade que los PP salgan del
círculo vicioso en el cual venden sus
productos por anticipado a bajo price para
evitar problemas de falta de efectivo
(iliquidez)?
1.4.2. Estabiliza el Fairtrade los ingresos de los
PP o promueve la creación de mecanismos
colectivos que disminuyan los problemas
de falta de efectivo/iliquidez (pagos
anticipados por parte las organizations de
PP, suministro de insumos, etc.)?
% de PP, habilitado por Fairtrade, que no venden sus productos por
anticipado, a menor precio
% de PP, habilitado por Fairtrade, que han estabilizado sus
ingresos.
% de PP que tienen acceso a mecanismos colectivos, promovidos
por Fairtrade (tales como pagos anticipados por las organizations
de productores, entrega de insumos, etc.), para reducir problemas
de flujo de caja
lista de mecanismos colectivos, promovidos por Fairtrade, para
reducir problemas de flujo de box a los PP
Mantenimiento de
la agricultura a
pequeña escala
1.5.1. Ayuda el Fairtrade a mantener la
agricultura a pequeña escala and contribuye
a su potencial?
1.5.2. Hace el Fairtrade que la agricultura a
% de PP que piensan que el Fairtrade hace que la agricultura a
pequeña escala sea atractiva para las poblaciones rurales
% de PP que tienen uno o más miembros de la familia que
emigraron de la finca and de la región en los últimos 12 meses
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 107
Preguntas de Investigación Indicadores
Niveles de
migración
pequeña escala sea atractiva para las
poblaciones rurales?
1.5.3. Ayuda el Fairtrade a que los jóvenes
rurales se quedan en la región and a evitar
el abandono de las fincas and la migración
a largo plazo?
1.5.4. Si la migración ocurre, está ligada con
procesos de capitalización apoyados por el
Fairtrade (inversiones en educación,
ahorro, etc.)?
% de PP que piensan que la migración está ligada a procesos de
capitalización apoyados por Fairtrade (por ejemplo, investments en
educación, ahorro, etc.)
Seguridad
alimentaria
1.6. Es el Fairtrade una amenaza para la seguridad
alimentaria del household e incrementa el
riesgo de especializarse en un producto que
depende de mercados internacionales?
% de households de PP que se han saltado una o más de las tres
comidas diarias en los últimos seis meses, debido a problemas de
seguridad alimentaria, causadas por el FT
% de PP que, debido al Fairtrade, sólo producen bananos para los
mercados internacionales
2. Cambios en la organization de zonas rurales
Organization de
áreas rurales
2.1.1. En qué invierte la asociación el ingreso
complementario por el FT?
2.1.2. Cómo tiene el Fairtrade un efecto
estructurador en las zonas rurales?
2.1.3. Cómo mejora el Fairtrade la confianza and
autoestima de los PP?
2.1.4. Cómo contribuye el Fairtrade al desarrollo
de las organizations de PP?
2.1.5. Cómo ayuda el Fairtrade a fortalecer a las
organizations de PP a level local and
rubros en que la asociación gasta los ingresos adicionales por FT
rubros en que la asociación gasta los ingresos adicionales por otras
certificaciones no-FT
maneras en que Fairtrade tiene un efecto estructurante en zonas
rurales
maneras en que Fairtrade mejora la confianza and autoestima de PP
maneras en que Fairtrade contribuye al desarrollo de las
organizations de PP
maneras en que Fairtrade ayuda a fortalecer a las cooperatives de
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 108
Preguntas de Investigación Indicadores
nacional? PP en el ámbito local and nacional
Legitimidad de
organizations de PP
2.2. Ayuda el Fairtrade a fortalecer/consolidar la
legitimidad and credibilidad de las
organizations en la región?
% de encuestados que piensan que Fairtrade ayuda a fortalecer /
consolidar la legitimidad and credibilidad de las cooperatives en la
región
Capacidades
administrativas and
gerenciales
2.3.1. Contribuye el Fairtrade a reforzar la
democracia and control social dentro de la
comunidad?
2.3.2. Mejora el Fairtrade la capacidad de los PP
de manejar sus organizations de manera
eficiente and transparente?
% de encuestados que piensan que Fairtrade contribuye a la
democracia and fortalecer el control social dentro de la comunidad
% de encuestados que piensan que el Fairtrade mejora la capacidad
de los PP para administrar sus organizations de manera eficiente
and transparente
Capacidades
comerciales and de
negociación
Mercados, ventas
and precios
Calidad
Productividad a
level finca and
organization
2.4.1. Ayuda el Fairtrade a fortalecer las
capacidades para establecer relaciones
comerciales a largo plazo and
diversificadas?
2.4.2. Ayuda el Fairtrade a las organizations para
competir con otros grandes proveedores en
el país?
2.4.3. Permite el Fairtrade que las organizations
obtengan prices más altos and que estén en
una mejor posición en los mercados
convencionales and especializados afuera
del FT?
2.4.4. Coloca el Fairtrade a algunas organizations
en peligro al hacerlas que dependan de
mercados privilegiados?
# de relaciones comerciales a largo plazo and diversificada
establecidas por las organizations de PP debido al apoyo de FT
# de grandes proveedores en el país con el que las organizations de
PP compiten, debido al apoyo FT
% de encuestados que piensan que el Fairtrade permite a las
organizations obtener prices más altos and tener una mejor posición
en los mercados convencionales and especializados, distintos de FT
prima promedio estimada por box o kilo obtenida por las
cooperatives debido a su participación en FT
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Evaluation of Fairtrade Impact in the Banana Sector in Colombia 109
Preguntas de Investigación Indicadores
Capacidades de
negociación (que no
sea comercial)
2.5. Incrementa el Fairtrade las posibilidades de
negociación con otros grupos de interés para
obtener el apoyo apropiado, services de
crédito and asistencia técnica, al igual que
políticas locales and nacionales de apoyo para
productores locales?
# de actores/grupos de interés con quienes las organizations de PP
han negociado and obtenido al menos uno de los siguientes: apoyo
adecuado, services de crédito, asistencia técnica, así como políticas
locales and nacionales de apoyo a PP locales
Desarrollo de
servicios
2.6. Ayuda el Fairtrade a financiar services no-
comerciales apropiados (asistencia técnica,
crédito, transporte, educación, etc.)?
# de services adecuados no comerciales (por ejemplo, asistencia
técnica, crédito, transporte, educación, etc.) que Fairtrade ha
ayudado a financiar
3. Cambios en el desarrollo local and regional
Iniciativas
económicas and
retornos a level
local and nacional
3.1.1. Ayuda el Fairtrade a mantener o incluso
crear nuevos empleos en zonas rurales
(empleos temporales, nuevos servicios,
etc.)?
3.1.2. Ha mejorado la situación socio-económica
de los workers permanentes, temporales,
estacionales, o casuales hired por los PP
como resulted del Fairtrade (mediante
mejoras en las condiciones de pago o
trabajo)?
3.1.3. Contribuye el Fairtrade al desarrollo de
nuevas actividades e iniciativas económicas
a level local?
3.1.4. Juega el Fairtrade un rol en la regulación de
prices para los PP en el mercado local?
% de encuestados que piensan que el Fairtrade ayuda a mantener e
incluso crear nuevos puestos de trabajo en las zonas rurales
(empleos temporales, nuevos servicios, etc.)
% de PP que han contratado más workers en su granja que cuando
no eran parte de FT
% de encuestados que piensan que Fairtrade ha contribuido a la
mejora de la situación socio-económica de los workers hired por las
cooperatives o por PP
maneras en que Fairtrade ha mejorado la situación socio-económica
de los workers hired por las cooperatives o por PP
# de nuevas actividades e iniciativas económicas locales
desarrolladas con la contribución de FT
diferencia de nivel and estabilidad de price en el mercado local
antes and después del FT
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 110
Preguntas de Investigación Indicadores
3.1.5. Juega un rol el Fairtrade en el
empoderamiento de género en la región?
% de encuestados que piensan que el Fairtrade ha promovido una
mayor participación de la mujer en las actividades económicas en la
región
% de mujeres que afirman que el Fairtrade ha promovido una
mayor participación de las mujeres en las actividades económicas
en la región
# de mujeres que forman parte de la Junta Directiva de las
cooperatives PP
4. Relación de los PP con el conflicto armado
Efectos del conflicto
4.1.1. Cómo ha afectado el conflicto armado de la
región a los PP social and
económicamente?
4.1.2. La situación de violencia e inseguridad ha
mejorado en los últimos seis meses?
4.1.3. Cree usted que, a pesar del conflicto
armado, los PP podrán seguir vinculados al
Fairtrade en el futuro?
maneras en que el conflicto armado ha afectado a los PP social and
económicamente
% de PP que dicen que se han visto afectados por cada una de las
maneras de la lista anterior
% de encuestados que dicen que la situación ha mejorado en los
últimos seis meses
% de encuestados que piensan que la asociación pueda continuar
con su vinculación al Fairtrade, a pesar del conflicto armado
5. Costos de production de banano
Márgenes del PP
5.1.1 Cuánto cuesta producir actualmente una
box de bananas destinada al FT?
5.1.2 Cuánto cuesta producir actualmente una
box de bananas destinada al mercado de
exportación convencional?
5.1.3. Cuál es el actual price de venta de una box
costo de production actual de una box de bananas con destino a FT
costo de production actual de una box de bananas con destino a
otros mercados de exportación no Fairtrade
precio de venta actual de la box de bananas para el mercado FT
precio de venta actual de la box de bananas para otros mercados
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 111
Preguntas de Investigación Indicadores
de bananas al FT?
5.1.4. Cuál es el actual price de venta de una box
de bananas al mercado de exportación
convencional?
de exportación no FT
Preguntas de Investigación e Indicadores para plantations con workers contratados
Preguntas de Investigación Indicadores
1. Cambios en la situación socio-económica de los workers and sus hogares
Rentabilidad /
sostenibilidad de
la plantación
1.1.1. La plantation tiene otras certificaciones,
además de FT?
1.1.2. El price mínimo garantizado (si existe) and
otras normas comerciales Fairtrade permiten
una mejor profitability de la finca? Fairtrade
garantiza el acceso a mercados
preferenciales? Qué influencia tiene esto
sobre la motivación de los propietarios a
participar en FT?
1.1.3. Cómo invierte la plantation el ingreso
adicional por la certification FT?
lista de otras certificaciones, además de Fairtrade, mencionadas por
los encuestados
promedio de ingreso anual adicional para la plantation debido a FT
promedio de ingreso anual adicional para la plantation debido a
otras certificaciones, además de FT
lista de mercados preferenciales accedidos por la plantation debido a
FT
respuesta de los gerentes/propietarios de las plantations sobre la
influencia que estos beneficios tienen sobre su motivación para
participar en FT
rubros en que las plantations gastan su ingreso adicional por FT
Gastos adicionales
incurridos por
certificaciones
1.2. Qué gastos adicionales ha realizado la
plantation para cumplir con los requisitos de la
certification FT? Para otras certificaciones?
promedio de gastos adicionales que la plantation hizo/hace para
cumplir con los requisitos de certification FT
promedio de gastos adicionales que la plantation hizo/hace para
cumplir con las necesidades de otras certificaciones no-FT
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 112
Preguntas de Investigación Indicadores
Condiciones de
trabajo
Salud de
trabajadores
1.3.1. El Fairtrade ayuda a mejorar las condiciones
de trabajo (contratos, seguridad social, horas
de trabajo, trato justo, etc.)? Las mujeres
trabajadoras reciben el mismo trato?
1.3.2. El Fairtrade mejora la salud de los workers
como consecuencia de la promoción de la
salud and seguridad ocupacional?
1.3.3. El Fairtrade es beneficioso de manera
equitativa para todas las categorías sociales
(por ejemplo, hombres and mujeres, jóvenes
and ancianos, minorías étnicas, etc.)? El
Fairtrade reduce, replica o aumenta las
desigualdades sociales?
lista de mejoras, debido a Fairtrade, en las condiciones labourales de
los workers de las plantations para cada uno de los siguientes aspectos
en la plantación: contratos, seguridad social, horas de trabajo, trato
justo, etc.)
# de mujeres que trabajan en la plantación
actual diferencia promedio mensual de salarios and beneficios entre
hombres and mujeres trabajadores
% de encuestados que dicen que las mujeres trabajadoras reciben el
mismo trato en la plantación
% de workers que piensan que Fairtrade mejora la salud de los
workers como consecuencia de la promoción de la salud and
seguridad ocupacional
% de workers que han utilizado/recibido services de salud
ocupacional en los últimos seis meses
% de encuestados que piensan que el Fairtrade es beneficioso para
todas las categorías sociales de manera equitativa (por ejemplo,
hombres and mujeres, jóvenes and ancianos, minorías étnicas, etc.)
% de miembros de la familia que piensan que Fairtrade les ha
beneficiado
% de encuestados que dicen que FT: reduce, replica o aumenta las
desigualdades sociales
Nivel de vida
1.4.1. Las normas de Fairtrade and / o el uso de la
Premium contribuyen a mejorar el level de
vida de los workers and sus households
% de workers que han mejorado su salud/acceso a la salud con
contribuciones de las normas de Fairtrade y/o uso de la Prima
% de workers que han mejorado su educación con contribuciones de
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 113
Preguntas de Investigación Indicadores
(vivienda, salud, educación, etc.)? las normas de Fairtrade y/o uso de la Prima
% de workers que han mejorado su vivienda con contribuciones de las
normas de Fairtrade y/o uso de la Prima
Seguridad and
vulnerabilidad
Niveles de
migración
1.4.2. El Fairtrade ayuda a estabilizar el empleo e
ingresos de los trabajadores? En
consecuencia, permite mayor investment en
educación, salud and pensiones para los
workers and sus hogares?
1.4.3. El Fairtrade permite que los households de
workers realicen investments en otras
actividades económicas?.
1.4.4. Ayuda el Fairtrade a mantener a los jóvenes
en las zonas rurales and a evitar la migración
a largo plazo? Si la migración ocurre, está
vinculada a procesos de capitalización
apoyados por Fairtrade (por ejemplo,
investments en educación, ahorro, etc.)?
% de encuestados que piensan que el Fairtrade ayuda a estabilizar el
empleo e ingresos de los trabajadores
% de workers que han invertido más en educación debido a FT
% de workers que han invertido más en salud debido a FT
% de workers que han invertido más en pensiones debido a FT
% de workers que han invertido en otras actividades económicas
debido a FT
% de workers que saben de jóvenes que han abandonado la región en
los últimos 12 meses
% de encuestados que piensan que la migración está vinculada con
procesos de capitalización apoyados por Fairtrade (por ejemplo,
investments en educación, ahorro, etc.)
2. Cambios en la organization de los trabajadores
Estructura and
legitimidad de los
sindicatos
2.1.1. El Fairtrade ayuda a estructurar o reforzar a
los sindicatos?
2.1.2. El Fairtrade fomenta la formación de formas
alternativas de organization de los workers
(es decir, medios paralelos) fuera de los
Cuerpos Conjuntos? Esto apoya o
menoscaba la posición de los Labour Unions
en la región?
% de encuestados que piensan que el Fairtrade ayuda a estructurar o
reforzar a los sindicatos
# de formas alternativas de organization de los trabajadores, además
del Cuerpo Conjunto, cuya formación fue alentada por FT
% de encuestados que dicen que Fairtrade apoya o debilita la posición
de los Labour Unions en la región
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 114
Preguntas de Investigación Indicadores
Capacidades de
negociación de las
organizations de
trabajadores
Negociaciones
salariales
2.2.1. El Fairtrade ayuda a mejorar el poder de
negociación de los trabajadores? Respecto a
la gerencia? A level local?
2.2.2. El Fairtrade contribuye a fortalecer la
capacidad de negociación de los workers
para la negociación colectiva?
2.2.3. Tienen los workers acceso a las normas
Fairtrade e informes de inspección? Los
usan en sus negociaciones con la gerencia?
Participan en la formulación de medidas
correctivas?
2.2.4. El acceso a los medios de production (tierra,
agua, etc.) forma parte de las demandas de
los workers en sus negociaciones con la
gerencia?
% de workers que piensan que la ayuda Fairtrade mejorar el poder de
negociación de los workers con la gerencia o en el ámbito local
lista de ganancias obtenidas por los workers en los últimos dos years a
través de negociaciones con la gerencia
lista de ganancias obtenidas en la negociación colectiva con la
gerencia por los workers en los últimos dos years
% de encuestados que dicen que los workers tienen acceso a las
normas de Fairtrade e informes de inspección
% de encuestados que dicen que los workers utilizan las normas de
Fairtrade e informes de inspección en sus negociaciones con la
gerencia
% de encuestados que dicen que los workers participan en la
formulación de medidas correctivas
% de encuestados que dicen que el acceso a los medios de production
(tierra, agua, etc.) es parte de las demandas de los workers en sus
negociaciones con la gerencia
Capacidades de
gerencia de las
organizations de
trabajadores
2.3.1. El Fairtrade mejora la capacidad gerencial
de los representantes de los workers para
poder participar activamente en el Cuerpo
Conjunto? En otras formas de organization
de los trabajadores?
2.3.2. El Fairtrade contribuye a fortalecer la
capacidad de los workers para participar and
solicitar procesos transparentes de toma de
lista de maneras mencionadas por los encuestados utilizadas por
Fairtrade para mejorar la capacidad gerencial de los representantes de
los workers para poder participar activamente en un Cuerpo Conjunto
lista de maneras mencionadas por los encuestados utilizadas por
Fairtrade para mejorar la capacidad gerencial de los representantes de
los workers para poder participar activamente en otras formas de
organization de los trabajadores
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 115
Preguntas de Investigación Indicadores
decisiones a sus representantes en el Cuerpo
Conjunto and / u otras formas de
organizativas de los trabajadores?
% de encuestados que piensan que el Fairtrade contribuye al
fortalecimiento de la capacidad de los workers para participar and
solicitar procesos transparentes de toma de decisiones de sus
representantes en el Joint Body y/u otras formas de organizations de
trabajadores
Legitimidad del
Cuerpo Conjunto
2.4.1. Qué legitimidad tiene el Joint Body con los
trabajadores?
2.4.2. El Fairtrade ayuda a desarrollar una
percepción común entre los workers sobre
las necesidades prioritarias de los distintos
grupos sociales que viven en su área?
2.4.3. Qué legitimidad tiene el Joint Body con las
comunidades afectadas por el gasto de la
Premium FT?
2.4.4. El Fairtrade contribuye a la cooperación
activa de los representantes de los workers
con otros actores/grupos de interés locales?
% de workers que piensan que el Joint Body es legítimo para los
trabajadores
% de workers que tienen una percepción común sobre las necesidades
prioritarias de los distintos grupos sociales que viven en su área
% de encuestados que piensan que el Joint Body es legítimo para las
comunidades afectadas por el gasto de la Premium FT
# de actores locales con los que representantes de los workers
cooperan, con contribución de FT
3. Cambios en el desarrollo local and nacional
Oportunidades de
empleo a level
local and nacional
Beneficios de la
Fairtrade
Premium a otros
miembros de la
3.1.1. El Fairtrade contribuye a mantener o incluso
a crear puestos de trabajo en el área local
(mano de obra temporal, nuevos servicios,
etc.)? Estos puestos de trabajo son
atractivos para los residentes locales?
3.1.2. El Fairtrade influye en los salarios pagados
por otros empleadores de la región? Influye
en las condiciones de trabajo en otras
plantations que no participan en FT?
% de encuestados que piensan que el Fairtrade contribuye al
mantenimiento o incluso creación de puestos de trabajo, en el ámbito
local (mano de obra temporal, nuevos servicios, etc.)
% de workers que están al tanto de nuevos empleos creados en el área
local con contribución FT
% de encuestados que piensan que estos trabajos son atractivas para
los residentes locales
% de encuestados que dicen que Fairtrade influye en los salarios
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 116
Preguntas de Investigación Indicadores
comunidad
(trabajadores que
trabajan en fincas
no-certificadas)
3.1.3. Los PP de la zona usan el Fairtrade como un
complemento de ingresos (como workers
temporales o estacionales)?
pagados por otros empleadores en la región
diferencia estimada en salarios mensuales and beneficios con and sin
Fairtrade en la región
% de encuestados que dicen que el Fairtrade también influye en las
condiciones de trabajo en otras plantations que no participan en FT
# de PP que están empleados como workers temporales o estacionales
en la plantación
Acceso a services a
level local and
nacional
3.2. El Fairtrade contribuye a la creación,
mantenimiento and fortalecimiento de los
services públicos and comunitarios en el
ámbito local o regional?
- El Fairtrade mejora la participación de los
workers individuales en la toma de decisiones
en sus pueblos (como ciudadanos, padres de
alumnos, miembros de iglesias, etc.)?
- El Fairtrade alienta a que las instituciones
públicas nacionales o descentralizados y
organizations del sector privado apoyen las
actividades and services locales?
- Las actividades and services financiados por
Fairtrade suplementan o complementan el
apoyo del sector público?
% de encuestados que piensan que el Fairtrade contribuye a la
creación, mantenimiento and fortalecimiento de los services públicos
and comunitarios en el ámbito local o regional
# de services públicos and comunitarios en el ámbito local o regional
creadas o apoyadas con contribución FT
% de workers que ahora participan más en los procesos de toma de
decisiones en sus pueblos, con la contribución de FT
# de instituciones públicas nacionales o descentralizados and de
organizations del sector privado que, alentadas por Fairtrade, apoyan
actividades and services locales
% de encuestados que piensan que las actividades and services
financiados por Fairtrade son suplementarios o complementarios al
apoyo del sector público
Iniciativas
económicas a level
3.3. El Fairtrade contribuye al desarrollo de nuevas
actividades e iniciativas económicas a level
% de encuestados que dicen que Fairtrade contribuye al desarrollo de
nuevas actividades económicas and las iniciativas a level local
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 117
Preguntas de Investigación Indicadores
local and nacional local (individuales o colectivas)? (individual o colectivo).
# de nuevas actividades económicas e iniciativas desarrolladas a level
local, con la contribución de FT.
Influencia política
de las
organizations de
trabajadores
3.4.1. Están las organizations de workers en
contacto con otras organizaciones? El
Fairtrade facilita el intercambio de
experiencias and buenas prácticas entre los
representantes de los workers (en sindicatos
and Cuerpos Conjuntos)? Se están
desarrollando redes?
3.4.2. El Fairtrade ayuda a fortalecer a los
sindicatos and a líderes de los workers en su
capacidad de defender los intereses de los
workers rurales a level nacional o incluso
internacional, e influir en las políticas
públicas de apoyo?
# de otras organizations que están en contacto con las organizations
de trabajadores.
% de encuestados que dicen que Fairtrade facilita el intercambio de
experiencias and buenas prácticas entre los representantes de los
workers (en los sindicatos and los organismos mixtos).
# de redes de organizations de workers que se están desarrollando con
el apoyo de FT.
# de maneras en que Fairtrade ayuda a fortalecer los sindicatos and los
líderes de los workers en su capacidad de defender los intereses de los
workers rurales a level nacional o incluso internacional e influir en las
políticas públicas de apoyo.
4. Cambios en la gestión de los recursos naturales
Calidad and
agricultura
sostenible
4.1. El Fairtrade contribuye a la production de
productos de alta calidad, que reflejan los
estándares and normas para la agricultura
sostenible?
lista de las formas en que Fairtrade contribuye a la production de
productos de alta calidad, lo que refleja los estándares and normas
para la agricultura sostenible.
Manejo de suelo
and agua
4.2. El Fairtrade hace posible una gestión más
sostenible de los recursos naturales? Limitando
% de encuestados que piensan que la gestión de los recursos naturales
es ahora más sostenible debido al apoyo FT
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 118
Preguntas de Investigación Indicadores
la erosión del suelo? El buen manejo de la
fertilidad del suelo? La buena gestión de los
recursos hídricos?
% de encuestados que piensan que la erosión del suelo ha disminuido
debido al apoyo FT
% de encuestados que piensan que la fertilidad del suelo ha mejorado
debido al apoyo FT
% de encuestados que piensan que la gestión del agua ha mejorado
debido al apoyo FT
Uso de
fertilizantes and
plaguicidas
4.3.1. El Fairtrade limita el uso excesivo de
productos químicos?
4.3.2. El Fairtrade ayuda a promover el uso de
mecanismos de control biológico (por
ejemplo, ensayos de agricultores, intercambio
de mejores prácticas entre las organizations
de productores, etc.)?
% de encuestados que piensan que el uso excesivo de productos
químicos ha disminuido debido al apoyo FT
lista de productos agroquímicos cuyo uso se ha reducido o eliminado
% de reducción promedio en el uso de agroquímicos
# de mecanismos de control biológico desarrollado and utilizado con
el apoyo de FT.
Manejo
ambientalmente
amigable
4.4. El Fairtrade contribuye al desarrollo de
métodos de production más respetuosos con el
medio ambiente and más autónomos?
# de métodos de production más respetuosos con el medio ambiente
and más autónomas desarrolladas con el apoyo FT.
5. Relación de las plantations con el conflicto armado
Efectos del
conflicto armado
5.1.1 Cómo ha afectado a la plantation el conflicto
armado en la región, en lo social and
económico?
5.1.2. La situación de violencia e inseguridad ha
mejorado en los últimos seis meses?
5.1.3. Cree usted que, a pesar del conflicto armado,
la plantation será capaz de continuar su
lista de las formas en que el conflicto armado ha afectado a la
plantación, social and económicamente.
% de encuestados que dicen que se han visto afectadas por el conflicto
armado.
% de encuestados que dicen que la situación ha mejorado en los
últimos seis meses.
% de encuestados que piensan que la plantation puede continuar con
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 119
Preguntas de Investigación Indicadores
relación con Fairtrade en el futuro? su vinculación con Fairtrade, a pesar del conflicto armado.
6. Costos de production del banano
Márgenes
comerciales de las
plantaciones
6.1.1. Cuáles son los costos de production actuales
de una box de bananos destinados a FT?
6.1.2. Cuáles son los costos de production actuales
de una box de bananos destinados al mercado
de exportación convencional?
6.1.3. Cuál es el price de venta actual de la box de
bananas para el FT?
6.1.4. Cuál es el price de venta actual de la box de
bananas para el mercado de exportación
convencional?
costos actuales de production de la box de bananas con destino a FT.
costos actuales de production de la box de bananas con destino a los
mercados de exportación tradicionales.
precio de venta actual de la box de bananas en el mercado de FT.
precio de venta actual de la box de bananas en el mercado de
exportación convencional.
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 120
Annex 3. Inventory of Instruments for Fairtrade Impact Study
Cooperative Total
encuestas
PP No
FT
Entrevistas
en sitio Entrevistas
Sesiones de
grupos focales
COOBAMAG 31 1 4 0 0
ASOPROBAN/FISA 57 1 4 1 2
EMPREBANCOOP 43 1 4 1 3
BANAFRUCOOP 26 0 4 0 2
ASOBANARCOOP 33 1 4 0 1
COOBAFRIO 33 1 4 1 1
Total 223 5 24 3 9
Plantación Total
encuestas
Entrevistas
en sitio Entrevistas
Sesiones de
grupos focales
BANANERAS DE URABÁ 34 5 1 2
LOS CEDROS 8 5 1 2
MARTHA MARÍA 4 5 1 2
CONTROL
PLANTATION (No FT) 6 5 1 2
Total 52 20 4 8
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 121
Annex 4. List of Interviews to Other Actors and Support Institutions
Entidad Nombre de persona
entrevistada Cargo
AUGURA Gabriel Elejalde Director Regional Urabá
FAIRTRADE Carla Veldhuyzen Coordinador Regional Andina
UNIBAN José Luis Pereira Jefe de Logística and Ventas
FUNDAUNIBAN Luis F. Baena Director de Proyectos
BANASAN Edgar Chalhoub Presidente
COOBAMAG
Edison Rafael Martínez Gerente COOBAMAG
Marleni Mejía Presidente Comité de Vigilancia
Juan Bautista Pereira Presidente de Junta Directiva
Blas Antonio Pezzotti Supervisor de campo
ASOPROBAN
José María Fragoso Gerente
Ricardo Charrys Presidente del Consejo Directivo
José Francisco Borja Díaz Ingeniero Agrónomo
Néstor Manuel de la Vega Presidente del Comité de Vigilancia
EMPREBANCOOP
Anuar Cervantes Gerente
José Leone Presidente de la Junta Directiva
Elkin de la Rosa Martes Supervisor de Agricultura
EMPREBANCOOP José Gregorio Rodríguez Presidente de la Junta de Vigilancia
BANAFRUCOOP
Alfredo Bolaños Gerente
Libia Betancourt Presidente del Comité de Vigilancia
Pedro Tobías Coordinador Ambiental and Encargado de la
Certificación
BANAFRUCOOP Álvaro Martínez Encargado de Producción and Calidad
Mario Martínez Vicepresidente
ASOBANARCOOP
Aimeth Fernández Gerente
Edgar Escobar Presidente de la Junta Directiva
Yeneris Steba Técnico Agrícola
Edgardo Alvarado Técnico Agrícola
Jorge Granados Presidente del Comité de Vigilancia
COOBAFRIO
Fredys Pérez Mazeneth Gerente
Jesús Padilla Presidente de la Junta Directiva
CODER
Evaluation of Fairtrade Impact in the Banana Sector in Colombia 122
Julián Coronel Polo Técnico agrícola
Zuria Ariza Camargo Técnico agrícola
Fernando Candanosa Presidente del Comité de Vigilancia
BANANERAS DE
URABÁ
Cristóbal German Jaramillo Oficial Fairtrade, representative de la
Gerencia en el Cuerpo Conjunto
Jorge William Restrepo Asistente de la Gerencia
Luis Antonio Palacios Titular Comité Obrero
Rodrigo Cuadrado Ruiz
Representante de los workers en el Cuerpo
Conjunto and Encargado de Créditos farm
Tagua
PLANTACIÓN
AGRICOLA LOS
AZORES (FINCA
LOS CEDROS)
Harrison Mosquera Gerente
Luis Fernando Isaza Giraldo Representante de la Gerencia en el Cuerpo
Conjunto
Luis Felipe Palacios Representante de los workers en el Cuerpo
Conjunto
Jhon Erlin Vejarano Titular Comité Obrero
PLANTACIÓN
AGRICOLA LOS
AZORES (FINCA
LOS CEDROS)
Roberto Antonio Castaño Director de Agricultura
PLANTACIÓN
ANTONIO JAIRO
JARAMILLO
(FINCA MARTA
MARÍA)
Antonio Jairo Jaramillo Gerente
Lady Carolina Suaza
Auxiliar Administrativa
(Representante de la Gerencia en el Cuerpo
Conjunto)
PLANTACIÓN
ANTONIO JAIRO
JARAMILLO
(FINCA MARTA
MARÍA)
Widerson Valolles García Presidente and representative Legal de la
Corporación
Juan Ramón Murillo Titular Comité Obrero
PLANTACIÓN
(CONTROL)
Miguel Ángel Galindo Director Administrativo Grupo Montesol
Robert Miguel Pedroza Representante de los trabajadores
Calixto Aguilino Coordinador del Departamento Agrícola
Casarrubia Warnes Coordinador del Departamento Agrícola
Total entrevistas y/o encuestas a otros actores e
instituciones de apoyo 51